2010 Statistics of Income: Corporate Income Tax Returns
IRS has recently released a Statistics of Income (SOI) Tax report based on corporate income tax returns for the 2010 tax year (defined to include accounting periods ending July 2010 through June 2011). The report provides a summary of statistics, including the number of returns, total assets, total receipts, and net income (less deficit), income subject to tax, total income tax before credits, and total income tax after credits.
Background. The statistics in the SOI report generally reflect the changes in law and regs that became effective during the 2010 accounting periods covered. (For any given corporation, depending on the accounting period that the corporation used and the effective date of each law change, any given change may have been only partially applicable or not applicable at all.) The major changes that substantially affected the comparability of the statistics in this report with those of prior years include:
Small employer health insurance credit. For tax years beginning after Dec. 31, 2009, an eligible small employer (ESE) is entitled to a tax credit for making nonelective contributions to buy health insurance for its employees. (Code Sec. 45R) An ESE generally is an employer with no more than 25 full-time equivalent employees (FTEs) employed during its tax year, and whose employees have annual full-time equivalent wages that average no more than $50,000. The maximum credit is 35% of certain premiums paid. However, the full amount of the credit is available only to an employer with 10 or fewer FTEs and whose employees have average annual full-time equivalent wages from the employer of not more than $25,000.
Depreciation and amortization. For tax years beginning in 2010, the maximum Code Sec. 179 expense deduction was $500,000 ($535,000 for qualified enterprise zone property). This limit was reduced by the amount by which the cost of Code Sec. 179 property placed in service during the tax year exceeded $2 million.
The election to accelerate research and minimum tax credits in lieu of special depreciation allowances applied only to certain property placed in service before Jan. 1, 2011. For fiscal years ending after Dec. 31, 2010, only minimum tax credits could be elected to be accelerated in lieu of special depreciation allowances for “round 2 extension property” (i.e., generally eligible qualified property placed in service after Dec. 31, 2010 and before Jan. 1, 2013 (Jan. 1, 2014 for certain aircraft and long-production-period property)).
New hire retention credit. The new hire credit could only be claimed if the qualified employee was hired after Feb. 3, 2010 and before Jan. 1, 2011, and worked for 52 consecutive weeks. The credit was the smaller of $1,000 or 6.2% of the employee’s wages (as defined for income tax withholding purposes) for the 52-consecutive-week period.
S Corporation built-in gains tax. For tax years beginning in 2009 or 2010, no tax was imposed on the net recognized built-in gain of an S corporation after the 7th tax year in the recognition period.
SOI report. The SOI report provides statistics summarizing overall corporate activity for the 2010 tax year. Highlights of the report include the following:
… Number of returns. In 2010, 5,813,725 active corporations filed returns. This was a decrease of approximately 0.2% from the 5,824,545 returns filed for 2009. In 2010, an all-time high of 3,018,893 returns were filed electronically, a 39% increase from corporate returns filed electronically in 2009. Of the 5.8 million active corporations for the 2010 tax year, approximately 4.1 million were pass-through entities (e.g., regulated investment companies (RICs), real estate investment trust (REITs), and S corporations).
… Total assets. In 2010, total assets for active corporations reached $79.9 trillion, a 5.3% increase from $75.9 trillion in 2009. By sector, Management of Companies (Holding Companies) experienced the largest net decrease, down 15.5% from $17.9 trillion in 2009 to $15.2 trillion in 2010. Wholesale recorded an increase of $488 million in total assets, showing the largest percent change (up 22.5%) for the 2010 tax year.
… Total receipts. In 2010, total receipts from operations and investments were $26.2 trillion, a 5.6% increase from $24.8 trillion in 2009. However, there were large decreases in investment income during the year. Interest received declined 13.3%, from $1.5 trillion to $1.3 trillion. In comparison, net capital gains rose 75% from $84.1 billion in 2009 to $147.2 billion in 2010. By sector, Management of Companies (Holding Companies) experienced the largest decrease in total receipts, falling $90.4 billion or 9.9% during the year.
… Total deductions. In 2010, total deductions were $24.9 trillion, a 4.2% increase from $23.9 trillion in 2009. The cost of goods sold (a component of total deductions) rose 9% during the year, from $13.3 trillion to $14.5 trillion.
… Corporate pre-tax profits. In 2010, corporate pre-tax profits-also known as net income-was $1.4 trillion (less deficit), a 52.3% increase from $919 billion for 2009. When excluding pass-through entities from the total, pre-tax profits increased 80.7% from $443.2 billion in 2009 to $800.8 billion in 2010. During 2010, pass-through entities (which pass any profits or losses to their shareholders where they are taxed at the individual rate) showed an increase in pre-tax profits of 16.8% or $79.9 billion.
… Income subject to tax. In 2010, the income subject to tax (the tax base) grew to $1.0 trillion, an 11.7% increase from $894.9 billion in 2009.
… Income before credits. In 2010, total income tax before credits was $358.4 billion, a 14.3% increase from $313.5 billion in 2009.
… Income tax after credits. In 2010, total income tax after credits-i.e., the amount paid to the U.S. Government-was $223 billion, an 8.8% increase (or $18.0 billion) from $205 billion in 2009.
References: For corporate returns, see FTC 2d/FIN ¶ S-1902 ; FTC 2d/FIN ¶ S-1903 ; United States Tax Reporter ¶ 60,124.03 ; TaxDesk ¶ 609,801 ; TG ¶ 5809 .
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