by Bob McCabe, CPA
I have a corporation, but I operate two separate businesses under it. Do I file one corporate tax return or two? How do I handle the profit-and-loss statements?
You only need to file one corporate tax return for the two businesses. If you are a regular corporation, you will use Form 1120. If you are an S corporation, you will use Form 1120s. The profits and losses of a regular corporation stay in that entity while the profits and losses of an S corporation flow from the entity to its owners. Regular corporations pay federal taxes, but S corporations do not.
For the tax return, you should combine the profit and loss statements for both businesses. There are several off-the-shelf bookkeeping systems, such as QuickBooks and Peachtree, that make this task automatic.
Bob McCabe is principal of McCabe & Associates PhDs. You can reach him at (909) 302-8499.
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