wa-c-corp-tax
Navigating Taxes for Your New WA C-CorpThis guide provides an interactive overview of the key federal and Washington state tax obligations for a C-Corporation started within the last three years. Use the tools and timelines below to understand your responsibilities and plan for success. Federal Corporate Tax Rate21% Flat tax on net profits. WA B&O Tax Rate0.471% - 1.5% Varies by business classification. WA Sales Tax (State Rate)6.5% + local rates apply. Key Tax Rate ComparisonThis chart visualizes the different scales of major taxes. Note that Federal Income Tax applies to net profit, while Washington's B&O tax applies to gross revenue, a critical distinction for financial planning. Federal Tax ObligationsAll U.S. C-Corporations must comply with federal tax laws administered by the IRS. This section breaks down your primary responsibilities. Click on each item to see more details. C-Corporations pay a flat 21% income tax on their net profits. This is filed annually using Form 1120, U.S. Corporation Income Tax Return. The deadline is typically the 15th day of the fourth month after the end of the corporation's tax year (e.g., April 15 for a calendar year-end). Corporations that expect to owe $500 or more in tax for the year must pay estimated tax in four equal installments throughout the year. These payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. Use Form 1120-W, Estimated Tax for Corporations, to calculate your payments. If your corporation has employees, you are responsible for withholding and paying federal income taxes, Social Security and Medicare taxes (FICA), and Federal Unemployment (FUTA) tax. These are reported and paid on a recurring basis (e.g., quarterly via Form 941). You will also need to provide employees with Form W-2 each year. Washington State TaxesWashington does not have a corporate income tax. Instead, its tax system is primarily based on a gross receipts tax (the B&O tax), sales tax, and property tax. This section provides an overview and an interactive tool to estimate your potential B&O tax. Business & Occupation (B&O) TaxThe B&O tax is Washington's primary business tax. It's a tax on the gross income of the business, meaning there are no deductions for the costs of doing business. The rate you pay depends on your business activity classification. Use the estimator below to get a general idea of your B&O tax liability. B&O Tax EstimatorFirst 3 Years: A Startup Tax TimelineStaying compliant requires meeting key deadlines. This interactive timeline highlights the major tax-related events for a new C-Corporation. Click on each milestone to see what's involved. Month 1: Business FormationInitial registration and setup. First Quarter: Start of OperationsBegin tracking and planning. Year 1: First Annual FilingsCompleting your first tax year. Years 2-3: Ongoing ComplianceEstablishing a regular rhythm. |