Annual Report vs. Tax Declaration: Key differences that every entrepreneur must know

When you have a business in the United States, meeting your legal and tax obligations is key to ensuring that your company continues to operate smoothly. Two of the most important reports you must submit every year are the Annual Report and the Tax Return. Although both are annual procedures, their purpose, content, and deadlines are very different. In this article we explain the key differences and why it is essential to comply with both.

What is the Annual Report?

The Annual Report is a mandatory report that companies registered in the state where they operate must submit. Its main purpose is to keep the company’s legal information updated, confirming details such as:

✅ Company's official name
✅ Contact address
✅ Legal structure
✅ Directors or company members
✅ Main business activity

This report is essential to maintain the company's active legal status. Without the Annual Report submitted on time, the entity may be suspended or dissolved.

What is the Tax Return?

The business tax return is a document submitted to the IRS (or the corresponding tax authority) that reflects the company's financial situation. In this return, the following are reported:

✅ Gross income
✅ Operating expenses
✅ Tax deductions
✅ Net profits

The aim is to calculate the taxes the company must pay to the government. It is a matter of tax compliance, not legal.

Key Differences between the Annual Report and the Tax Return

Who Must Submit Each Report?

✅ Annual Report: Every registered company, regardless of size or income.
✅ Tax Return: Every company with income, whether or not it has made a profit.

Why is it important to comply with both procedures?

🔹 Without the Annual Report, the company may lose its registration and will not be able to operate legally.
🔹 Without the Tax Return, the business may face fines, surcharges, and even audits.

Complying with both reports ensures that your company is 100% compliant, avoiding surprises that could affect its continuity.

Tips to Keep Your Company Up to Date

🔔 Keep a calendar of key dates to submit each document.
📊 Keep your accounting and legal records updated throughout the year.
✅ Consult experts like Oplaics to avoid mistakes and meet all requirements.

The Annual Report and the Tax Return are two fundamental pillars for any company registered in the United States. They are not the same and each serves a different function, but both are equally important. Keeping up with these procedures is key to avoiding penalties, protecting your business, and ensuring its growth.

 Do you need help submitting your Annual Report?

At Oplaics we guide you every step of the way to ensure your company is 100% compliant. Contact us today!