All you need to know to file the Texas franchise tax report

The law for all the business operated in States to annual pay the Franchise tax report Texas comptroller is in charge of collecting the Levi, whereby all the businesses should file the tax report annually before the 15th of May. Any business that does not file their returns before the due date is finned a certain amount of money.

The franchise tax report Texas comptroller system be confusing without the proper knowledge. This kind of revenue is based on the entity’s margin, which can be calculated differently. The first step to understand is how the filling of taxes should be done.

Filling returns details

The Texas Franchise report can be filed in three ways depending on the kind of business. Which includes:

  1. No tax due
  2. EZ computation Long-form

The Franchise taxes are only applicable to businesses that have a revenue limit of $ 1,110,000 and above. Business with a lower limit can choose to fill out between EZ computation and long-form

How to calculate Franchising tax?

The tax margin can be calculated in any of the following ways.

  • The total amount of tax minus $ 1 million.
  • Entire tax minus cost of goods sold.
  • Entire tax minus compensation.
  • Total tax multiplied by 70 percent.

Steps to take when filling the franchise tax report

Organizations need to take the following steps to file their annual Franchise tax report Texas returns successfully.

Step 1: Business should keep in mind the due date and their filing fees.

Step 2: They should fill the tax report, which can be downloaded or completed online.

Step 3: Submit the report to the Texas comptroller of public account.

The return should be done before the due date; later than that, a fine should be added to the usual taxes. Companies are required to file tax returns even if they do not owe any taxes.

If the payment is made late with 30 days, an organization is charged 5% of the total due taxes. But if it is more than 30 days, the penalty increases for up to 10% of the due taxes.

How to submit the annual franchise report?

To file the Franchise tax report, Texas returns business, or organizations should visit the Texas Comptroller website. The process can either be done online or via mail. Below are steps that can help navigate the website.

Step 1: Visit the state website, click on the franchise tax page.

Step2: When filling online, click web file system login. When filling offline, click forms.

Not all kind of business is entitled to pay the Franchise tax. Some business is excluded due to one reason or another. Below is a list that outlines business that must pay this kind of taxes.

The business that must pay

  • All partnerships
  • Banks
  • Savings and loans
  • Corporations
  • LLCs and series LLCs
  • Business Associations
  • Joint ventures
  • Other Legal entities
  • Professional corporations
  • State limited banking Association
  • S- Corporation

Excluded business

  • Real estates and mortgage investments
  • Unincorporated political committees
  • Non-profits self-insurance trust
  • Sole proprietorship
  • Particular grantors trust, estates of natural; persons and Escrows
  • The general partnership owned directly by single natural persons
  • Trust exempt except under IRS code
  • Trust qualified under IRS code
  • Certain unincorporated passive entities

File return can bring pressure to many businesses; hence it is recommended for a business to pay all their due taxes to avoid unnecessary penalties. With the franchising tax, businesses only need to visit the sites and clear all their taxes. This will give the business owners to access to governments and big contracts.

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