USA Tax Returns : Types and Applicability


– CA Vishal Jagetiya, CA Shivam Thakkar

1. Introduction
The U.S. tax system is set up under both a federal and state level. There are several types of taxes such as income, sales, capital gains, etc. Federal and state taxes are completely separate and each one has is own authority to charge taxes. Tax Returns are generally prepared using forms prescribed by the IRS.
2. Types of Returns
(I) Form – 1040: Personal federal income tax returns filed by United States Residents, Green Card Holder or anyone residing in USA for more than 6 months need to file this return.

When? Income tax returns for individual calendar year taxpayers are due by Tax Day, which is usually April 15 of the next year.
Variants of 1040: For filing the regular tax return, in addition to the standard Form 1040, there are also two variants: the 1040NR and the 1040X.

  • Form 1040NR is used by taxpayers who are considered “non-resident aliens” for tax purposes.
  • Form 1040X is used to make corrections on Form 1040, Form 1040A, and Form 1040EZ tax returns that been previously filed.

(II) Form – 1065: Partnerships file an information return to report their income, gains, losses, deductions, credits, etc.

But When? 15th day of the third month after the end of your partnership’s fiscal year. For a December 31 year-end, the due date is March 15.
Pay Tax by Whom under Partnership?
  • A partnership does not pay tax on its income but “passes through” any profits or losses to its partners.
  • Partners must include partnership items on their tax or information returns.
  • The partnership, as well as an entity treated as a partnership for federal income tax purposes, uses Form 1065, U.S. Return of Partnership Income, to list this information.
  • Completion of the form can be confusing and complex, so it’s advisable to work with a knowledgeable tax professionals.

(III) Form – 1041: Tax Return for Estates and Trusts

By whom to file? In the year of a person’s death, he or she leaves both personal income and, in some cases, estate income. That’s why the person dealing with the estate of a deceased person will have to file personal income taxes for the deceased and, potentially, estate income taxes, too.
When to file? If Calendar year, then due date is on or before April 15.If fiscal year, then due date shall be 15th days of fourth month following the tax year close.

 (IV) Form – 1120: Corporation Income Tax Return

By Whom?
  • A corporation pays income tax by filing a corporate tax return on Form 1120 and paying the taxes as indicated by this return.
  • Also used to report income for other business entities that have elected to be taxed as a corporation (like LLC).
When? Filed by the 15th day of the 3rd month after the end of your corporation’s tax year.If your corporation has a December 31 tax year-end, you would need to file this tax report by March 31 of the following year.
Series of 1120:
  • 1120S: U.S. Income Tax Return for an S Corporation.
  • 1120C: U.S. Income Tax Return for Cooperative Associations.
  • 1120H: U.S. Income Tax Return for Homeowners Associations.

(V) Form – 1099: Report of various types of income other than salaries, wages by payer.

When to generate? It’s a record that an entity or person (not your employer) gave or paid you money.
Major Types of 1099:
  • 1099B: It’s covers income from the sale of several types of securities as well as some types of bartering that take place via bartering exchanges.
  • 1099 DIV: To report the dividends and other distributions you receive during the year.
  • 1099 INT: These interest payments are also taxable and are usually reported to you. (Taxpayers receive this form from banks where they have interest bearing accounts)
  • 1099 MISC: If you are an independent contractor or self-employed you should receive a Form 1099-MISC from each business client that pays you at least $600 during the tax year.

Completion of the some form can be confusing and complex, so it’s advisable to work with a knowledgeable tax professionals.

Chintan Patel is CA, CPA(USA), CISA(USA), DISA, DIRM(ICAI) and certified Ind AS and FAFD by ICAI. He is Regional Council Member of WIRC of ICAI. He is partner of Naresh J. Patel & Co. having more than 18 years of post-qualification experience in Ind AS, IFRS, Companies Act, GST. He is an author of books Quick Guide to Ind AS, ICDS published by Taxmann and Speaker at more than 500 presentations.

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