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1125-a instructions Form: What You Should Know
If you earn 400,000,000 for the 2024 tax year, you may be interested to know that if you have a C corporation, you are going to file Schedule C, instead of Form 5471, your 1040. Most of the time, when you do Schedule C, it is because you made some changes that are not reflected in 1040. For example, you now have 5 shareholders, instead of 3 as shown on your 1040. Or, you changed your address. So the new information on Form 1040 is the same as the old information, but since you have filed two schedules, you need to do all this twice. The Form 1040 allows you to take deductions for the same kinds of changes as Schedule C, such as when you changed your home address, or the income earned in the year, and how much capital gain you have. Here are some other reasons, you may want to use Schedule C, instead of Schedule 1040-ES: â–· You plan on having more than one shareholder, each of whom needs it separately. To use Schedule C, you need the information that is in Schedule 1040-ES, but the information you need from Schedule 1040-ES does not apply for purposes of filing Schedule C. For example, you cannot claim the cost of goods sold deduction as a result of having 2 shareholders. â–· You have made changes in your S corporation that you are interested in filing separately as Schedule C. â–· You need to use a Schedule C to file a Schedule K-1 with the IRS. It doesn't matter which form you used to create Schedule K-1 information. The two forms must cover the same information. â–· You think that you will need to file an S corporation election, so you don't have to fill out Form 1040, but you don't want any of the income in your Schedule C to be in the form of capital gain. â–· If you want to amend Schedule C and amend your Schedule K-1, you need to make sure that the information on both forms is the same. â–· With S corporations you usually do not have to file a Schedule M-2, so you may not need to be a Schedule C. â–· If you don't get a Form 1040A at the start of each tax year, you really don't need one.
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