One of the few US states with a minimum tax on enterprises is Oregon. All businesses operating in Oregon, including corporations, partnerships, and limited liability companies (LLCs), are subject to the minimum tax. This article will discuss the Oregon minimum tax and provide answers to some frequently asked questions about business taxes in Oregon.
Yes, all companies doing business in Oregon are subject to a minimum tax. The annual minimum tax for corporations is $150, and the annual minimum tax for LLCs is $150. Whether the company makes a profit or not does not affect the minimum tax that must be paid.
Owners of S corporations are not regarded as independent contractors. The shareholders of a S corporation are able to receive a portion of the company’s income, deductions, and credits. This implies that the shareholders record and pay taxes on the company’s income on their personal tax returns. Since the stockholders do not receive a W-2 or 1099 from the S corporation, they are not regarded as independent contractors. Why would you pick a S corporation, exactly?
You may decide to set up a S corporation for a number of reasons. Avoiding double taxation is one of the key justifications. In a typical business, taxes are levied twice: once when profits are retained by the company and once when dividends are paid to shareholders. Profits from a S corporation are only taxed once, at the level of the individual shareholders. S corporations also offer liability protection to the shareholders, shielding their private assets from the company’s obligations. In Oregon, how are LLCs taxed?
LLCs are taxed as pass-through entities in Oregon. In other words, the income, deductions, and credits of the firm are transferred to the individual members, who then record the income on their individual tax forms and pay the appropriate taxes on it. LLCs are likewise subject to the $150 annual minimum tax in Oregon.
Yes, Oregon automatically extends the deadline for submitting state tax returns. By submitting Form 40-EXT, you can request an automatic extension if you are unable to submit your Oregon tax return by the deadline. The six-month extension offers you more time to file your return, but it does not extend the deadline for making any tax payments that are due. To avoid penalties and interest, you must still pay any taxes owed by the original due date.
In conclusion, all firms operating in the state, including corporations, partnerships, and LLCs, are subject to the Oregon minimum tax. Whether the company makes a profit or not does not affect the minimum tax that must be paid. S corporations offer a number of advantages, such as avoiding double taxation and protecting stockholders from responsibility. LLCs in Oregon are subject to the $150 annual minimum tax and are taxed as pass-through entities. Last but not least, Oregon automatically extends the deadline for filing state tax returns, but not for making any owed tax payments.