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I am looking to start a C Corp in Delaware. I would like to…

I am looking to...

I am looking to start a C Corp in Delaware.

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I would like to understand the taxes that are involved.

Accountant's Assistant: Is there anything else important you think the Accountant should know?

Internet business selling golf coaching services online.
Internet platform selling golf coaching services via golf coaches in the US to their students. We collect the money from the students and then pay the coach at the end of the month.
Typical fees would be, student pays $150 per month and we keep $20 and pay the Coach $130
Based in South Africa and owned by a South African business
No office, employees or anything else in the US
Sketch me a picture of my tax obligation in other words all taxes that I would be liable to pay in the United States and when I would be liable to pay them.

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Answered in 33 minutes by:
10/18/2017
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,730
Experience: Personal Investment, Tax Preparation
Verified

That will be an US entity - regardless who are shareholders.

That US entity will be subject to corporate income taxes.

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Current corporate income tax rate is 15% for net income below $50,000.

As long as there is no income from Delaware sources - the corporation will NOT be subject to Delaware state income tax.

As long as the corporation doesn't sell any products or services to US customers - it will NOT be subject to sales taxes in the US.

Another issues will be with deducting business expenses and reporting requirements - we will cover these after we are clear with general income tax responsibility.

Let me know if you need any clarification.

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Customer reply replied 11 months ago
Thank you Lev,
We will sell golf coaching services, mainly in the United States but also the rest of the world. I assume we will then have to collect sales tax for our services?
How does this work?
When do you submit payments to the IRS for the sales tax collected?
Also, if I sell services online, how is it determined by the IRS where a person buying the service resides?
At what time does a C Corp have to pay corporate taxes? Is it once a year?

Regarding sales tax ...

There is no sales tax on the federal level...

Therefore the IRS will not worry and will not collect sales taxes.

Sales taxes are regulated by states - and each state has different rules and regulations.

However - in general - sales taxes apply to sales of physical goods and do not apply to sale of services.

So with your specific business model - if you do not sell goods - these sales will not be subject to sales tax.

But to be precised - you woudl need to verify state law in every state where your customers are located.

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Customer reply replied 11 months ago
Thank you, ***** ***** last question.
At what time does a C Corp have to pay corporate taxes? Is it once a year or how does it work?

Taxes are due by the due date of the tax return.
If you request an extension to file - that will NOT affect the due date for payment.

Generally, a corporation must file its income tax return by the 15th day of the 4th month after the end of its tax year.

If you are using a calendar tax year - the due date will be Apr 15 of the following year.
However if the tax liability is above $500 - the corporation will need to pay estimate taxes quarterly.

The corporation must make installment payments of estimated tax if it expects its total tax for the year (less applicable credits) to be $500 or more.
The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year.

Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,730
Experience: Personal Investment, Tax Preparation
Verified
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