TurboTax FAQ
TurboTax FAQ
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What types of returns does TurboTax Business handle?

TurboTax Business handles:

Estates and Trusts (Form 1041)

An estate consists of personal property (automobiles, furniture, etc.), real property (homes, land), and intangible property (stock certificates, bank accounts, etc.) that was owned by someone at the time of their death.

A trust is a business arrangement in which property is given by one person (the settler) to be held by another (the trustee) for the purposes of benefiting a specific class of persons or the general public (the charitable purpose).

Tax returns filed on the behalf of estates and trusts are also called fiduciary returns. A fiduciary is an individual (such as a trustee, administrator or executor) or organization legally responsible for managing assets on behalf of another party, usually called the beneficiary. The fiduciary is obligated to manage the beneficiary's assets in the best interests of the beneficiary.

Partnerships and Multi-Member LLCs (Form 1065)

Partnerships are a type of unincorporated business organization in which multiple owners (partners) manage the business and are equally liable for its debts.

Unlike an LLC or a corporation, each partner shares equal responsibility for the company's profits, losses, debts, and liabilities.

The partnership itself does not pay income taxes, but each partner has to report their share of business profits or losses on their individual tax return. The partnership will also file a Form 1065 tax return.

Limited Liability Companies (LLCs) are a relatively recent type of business structure that combine the advantages of corporations with those of sole proprietorships or partnerships.

Multi-member LLC profits and tax benefits are split by its owners (members). LLC returns are filed only for reporting purposes; the members report their business profits or losses on their individual (Form 1040) tax returns.

Not all multi-member LLC will file a 1065, however. A few will need to file aa a Corporation (Form 1120). More info

S Corporations (Form 1120S)

An S Corporation is a small business corporation, usually with less than 100 shareholders, which has elected to have its profits pass through to its shareholders, in the same manner as a partnership or sole proprietorship.

The owners (shareholders) of an S Corporation receive the benefit of limited liability, and are treated in the manner of partners for purposes of taxation. Income and losses from the business are passed directly to the shareholders, who then report their share of those amounts on their personal tax return. The S corporation itself will file an 1120S.

C Corporations (Form 1120)

A C Corporation (usually simply called a "corporation") is a separate legal entity that offers the greatest flexibility with respect to ownership and the free transferability of ownership interest.

Corporations file their own tax returns using Form 1120 to report income and losses.

Income is first taxed at the corporate level and, when distributed as dividends, the same money is taxed again at the shareholder level. As a result, income generated by a corporation can be taxed twice.