Delaware accounting and tax considerations
Many clients choose to outsource their Delaware accounting and tax obligations to Tetra Consultants. Tetra Consultants will timely complete your firm’s financial statements, corporate tax returns and manage auditors on your behalf and without the need to travel.
By outsourcing accounting and tax obligations to Tetra Consultants, you can reduce overhead costs while being ensured of timely reporting and filings. Our accounting team will explain to you all required deadlines and expectations before the start of the engagement.
Thereafter, our team will prepare the required fillings in advance to ensure we meet all stipulated deadlines. Tetra Consultants will send a weekly or bi-weekly update to our clients, ensuring all parties are aware of upcoming deadlines.
Annual Reporting Requirements
- Every Delaware-incorporated corporation has to submit an Annual Report at the time of payment for your Franchise Tax. Tetra Consultants will assist our clients in ensuring the due submission of every annual report.
- With a deadline stipulated before March 1 annually, this online submission requires the disclosure of all directors of the corporation and their addresses as well as the name of one officer.
Personal/corporate tax obligations
- A Delaware corporation is liable to pay both Delaware Corporate and LLC taxes. If your company is incorporated as a C-corp, you will have to pay taxes under USA corporation tax.
- On the other hand, a S-corp structure would be liable to pay personal taxes on the business profits. Tetra Consultants highly recommends you to be aware of your personal and corporate tax obligations. This is to ensure that both you and your company abide to international tax laws. Failure to do so may result in hefty fines or tax audits.
Corporate Income Tax
All corporations who do conduct business in Delaware are required to file a Corporate Income Tax Return. Delaware’s corporate income tax rate is held at 8.7% of federal taxable income allocated. The factors taken into apportionment are property, wages and sales in Delaware as a ratio of the overall property, wages and sales. However, corporations who do not conduct business in Delaware are exempted.
Annual Corporate Franchise Tax
- Under the laws of Delaware, a Delaware-incorporated corporation is also subjected to an annual corporate franchise tax. Every Delaware-incorporated corporation has to pay the fee before March 1, annually. The Franchise Tax is a privilege fee charged for being granted a special license from the state to conduct a business under the state’s laws.
- To calculate the annual corporate Franchise Tax, one can adopt either the Authorized Shares method or the Assumed Par Value Capital method. For corporations with no par value stock, the authorized shares method will always result in a lower tax sum. The method that results in the lower tax will be the one to adopt. Tetra Consultants will assist our clients in determining the taxation scheme to adopt.
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