Alabama Form Instructions 2553 2020-2024

Alabama Form Instructions 2553: What You Should Know

If you elect under section 1201(b) to be an S corporation. An entity elects the S corporation form, 2553. In addition, an entity elects all applicable information reporting and record keeping requirements. A corporation reports and records its income in the year its business taxable income is determined, the first week of the first taxable year that ends on or after the last day of the corporation's taxable year. A corporation has two taxable years — The first (the first tax year), which begins on the third Wednesday of the tax year, is a tax year for which it must file Form 1065. The second (the second tax year), which begins following the last day of the corporation's first tax year, is a tax year for which it must file Form 2553. Corporations have two tax years and two taxable years even though they have the same taxable income. Corporations have a tax year equal to the aggregate amount of its taxable income in the two tax years. Corporations may have taxable income in tax year 7 but have tax year 6 (including amounts not reported on Form 1065 or Form 2553) or a lower tax year. Business Use Tax A Business Use Tax is a tax on certain income for the purpose of preventing businesses from being used profitably in non-business pursuits. Alabama does not have an income tax. However, business use tax (BUT) was authorized by the legislature and approved by the voters when they voted on the new state Constitution in 2002. In 2002, the Alabama General Assembly amended the Alabama Constitution to prohibit the use of the general fund, except in certain limited circumstances, to pay a bit tax on income in excess of 2,100.00 or gross receipts not to exceed 20,000.00 per tax year. If you have property, profits, or other interests that you want to use to make a profit, you must register with the State Excise Tax Board for the purpose of paying an excise tax that is not subject to the limit on the general fund. To help you comply with this requirement, here are some forms and resources: The Alabama Excise Tax Board. This information system provides access to records, forms, and instructions on certain excise taxes and other business taxes. The Alabama Department of Revenue.

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