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corporate income tax

TAXES

Internal Revenue ServiceFI

LE A

RET

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Fiscal Year

DECLARE

Capital Gains

I RSTax rate

.

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Tax is the money the government collects from people & business to finance the running of the country.

Taxes

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Example“You   have   to   pay   your   taxes  every  year  even  if  you  disagree  with   how   the   government  spends  the  money.”

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Corporate  Income  Tax

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Corporate  Income  Tax

Companies pay

corporate income

tax as a percentage

of their profits.

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Example

“A   good   accountant   can   help  

reduce   the   amount   of   corporate  

income  tax  a  company  must  pay.”

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Internal  Revenue  Service

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Internal  Revenue  Service

The IRS is an agency

of the U.S. government

that collects taxes and

enforces tax laws.

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Example

“We  received  a  notice  from  the  

IRS   saying   that   we   are   late   in  

paying  our  taxes.”

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File  A  Return

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Tax  Return

Tax returns are the official statements of income and taxes owed.

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To  File  A  Return

When we file a return,

we submit these

statements to the

government for review.

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Example

“In   the   United   States,   the  

deadline  for  individuals  to  file  a  

tax  return  is  April  15th.”

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Fiscal  Year

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Fiscal  Year

The fiscal year is the one-year period a company uses to calculate their annual financial statements and taxes.

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Example“Our   company’s   fiscal   year  

matches   that   of   the   U.S.  

government,   running   from  

October  1st  to  September  30th.”

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To  Declare

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To  Declare

When a company files a tax return, it must declare, or officially state, what it has earned.

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Example“Most   tax   agencies   require  you   to   declare   income   you  have   earned   on   investments  in  other  countries.”

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Capital  Gains

Capital gains are the profits earned from selling an asset, such as a building, or an investment, such as shares.

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Capital  Gains  Tax

In most countries, companies and individuals are taxed on capital gains.

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Example“Our  tax  bill  was  very  large  last  

year   because   we   had   a   lot   of  

capital   gains   from   the   sale   of  

property.”

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Tax  Rate

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Tax  Rate

A tax rate is the percentage of tax that a company must pay to government.

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Tax  Rate

The US has a progressive tax rate system, which means rates are higher for companies with bigger profits.

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Example

“  The  IRS  charges  a  tax  rate  of  

15%   on   corporations   with  

income  under  $50,000.”

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Now, it’s your turn

to practice!

Practice

For  example,  if  you  hear…

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Most  tax  agencies  require  you  to                          

<beep>                    income  you  have  earned  

on  investments  in  other  countries.  

Example

ExampleYou  can  say  ...

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Most  tax  agencies  require  you  to                          

declare                    income  you  have  earned  on  

investments  in  other  countries.  

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get ready to speak

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Question  1

We  had  to  pay  tax  on  the  capital                                                  

…    <beep>    …                    we  earned  from  selling  

our  building.  

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Answer  1

We  had  to  pay  tax  on  the  capital  gains    we  earned  from  selling  our  

building.  

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Question  2

Your  company  should  file  a  tax    …                                    …                  

<beep>  …                  even  if  it  didn’t  make  a  profit.

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Answer  2

Your  company  should  file  a  tax  return    even  if  it  didn’t  make  a  profit.

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Question  3

Our  finance  team  is  working  hard  to  prepare  statements  for  the  end  of  our  fiscal    …                <beep>.  …            

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Answer  3

Our  finance  team  is  working  hard  to  prepare  statements  for  the  end  of  our  fiscal  year.  

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