Some of the Most Common Tax Returns
The 1040, or personal tax return, applies to every individual in the United States. Whether self-employed or employed by someone else, all individuals should file a 1040. The most common of all returns, the 1040 is essentially a way to measure personal income tax liability, with an opportunity to take deductions from income to reduce tax liability. Several different types of 1040s exist, including the 1040A, 1040EZ and 1040X, among others.
Form 1065 is used for partnership tax returns. Corporations are generally taxed differently than partnerships, meaning that many smaller companies choose to be incorporated as a partnership. Partners share in the profits or losses of the partnership and whether a net gain or loss, that number is passed through to individual (1040) tax returns.
The 1120 is actually made up of two different returns: the 1120 which is filed by C-Corporations and the 1120S which is filed by S-Corporations. C-Corps and S-Corps are similar except for the taxation differences: the income of a C-Corp is taxed, while the income of an S-Corp is usually not taxed; the income or loss is passed along to each shareholder and their personal tax return (1040).
990s aren't very well-known because they correspond to organizations that have been designated as tax-exempt or non-profit by the IRS. Within the parameters of a 990, several options are available: the regular 990, the 990-EZ and the 990-PF. The EZ may be used for organizations with gross income of less than $100,000 and total assets of $250,000 or less per year. The 990-PF is used by private foundation organizations. One of the most important functions that the 990 provides, aside from giving the IRS financial information, is informing the public of the income and expenditures of non-profit or tax-exempt organizations.
As with all accounting issues, be sure to consult a tax professional to determine what is right for you.
Published by Elizabeth Reed
Elizabeth is an avid traveler and photographer who has lived in Gdansk, Poland and Berlin, Germany and has spent extensive time in Switzerland and China. A recent college grad, she was the CFO for the large... View profile
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