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Summary of Annual Filing Obligations for Businesses in the United States

Each year, businesses in the United States are required to fulfill their legal obligations by preparing and submitting the following reports and tax filings:

Annual Report

The Annual Report is submitted to the state government where the business is incorporated. It provides updated information about the company’s address, ownership details, and any significant changes. This report must be filed annually, along with the company’s income tax declarations.

Federal Income Tax Returns

All businesses are required to file income tax returns with the federal government. The type of tax return depends on the legal structure of the business (LLC, Corporation, S-Corporation, etc.) and the number of members or shareholders.

State Income Tax Returns

Businesses must also file state income tax returns with the state government where they are incorporated or operate. The filing requirements vary depending on the type of business, the number of members/shareholders, and the selected tax filing option.

Sales Tax Returns

If a business sells goods or services and has a physical or economic presence (nexus) in one or more states, it is required to file sales tax returns for each applicable state.

Professional Tax Accounting Services for U.S. Companies

Our services include:

Annual tax accounting, ensuring that your business fully complies with legal requirements in the U.S.
Monthly or quarterly reporting services, helping your business maintain transparent and accurate financial records.

U.S. Tax System: Overview

The U.S. is a federal republic with power divided horizontally (President, Congress, Courts) and vertically (Federal and State governments). Each State has its own tax policies alongside Federal regulations. Individuals and foreign businesses in the U.S. must file and pay taxes to both the State government and the IRS.

What is U.S. Federal Tax?

All individuals and businesses in the U.S.—including U.S. citizens and foreign owners of U.S. companies—are required to file personal and corporate income tax returns with the Internal Revenue Service (IRS). This obligation applies even if the business has no profits.

What is U.S. State Tax?

In addition to Federal taxes, businesses may be subject to State taxes depending on where they are incorporated and operate. Each State has its own tax system, which may include:

Corporate Income Tax (CIT)
Personal Income Tax (PIT)
Franchise Tax
Sales Tax

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FAQs

Sales tax is generally imposed on both goods and services, but not all transactions are taxable. Some states exempt essential items like groceries, prescription drugs, or certain services. Additionally, some states offer reduced sales tax rates for specific products such as clothing or books.

Sales tax rates vary by state, ranging from 0% to 10%. Since each state sets its own tax policies, sales tax regulations can differ significantly across the U.S.

The amount of corporate income tax a U.S. company must pay each year depends on several factors:

At the State level, tax rates are determined by the state of incorporation, business entity type (LLC, Corporation, S Corporation), and the number of members or shareholders.
At the Federal level, corporate taxes are influenced by the company’s legal structure and the number of owners.

There is no fixed tax rate, as it varies based on the business type and location.