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Arizona Small Business Income tax in ProSeries

by ProSeries Professional 2021 Updated 5 months ago

Arizona now allows small business owners to calculate a flat tax on a portion of their income and modifications using an SBI return. Intuit ProSeries will calculate the regular tax without this income, then compute the SBI tax based on the SBI amounts you enter.

This article will help you:

  • Enter Arizona Small Business Income (SBI) amounts
  • Generate Form 140-SBI
  • Compare the results

How it works

The SBI return is optional and produces an overall tax that may be lower or higher for your clients. With that in mind, this article will help you compare which option is best for your client's bottom line.

1. Enter income normally

  1. Enter the full amounts of your client's income and deductions on the federal return as you would have in prior years.
  2. Open the Arizona return.
  3. Open Form 140: Resident Tax Return.
  4. Review lines 60 through 80 to note what the tax and refund/amount owed would be with the regular return.

2. Activate the SBI return

  1. Open the Arizona Information Worksheet.
  2. On the Arizona Information Worksheet scroll down to Part II - Main Form.
  3. Check Form 140-SBI: Small Business Income Tax Return (Resident).
  4. Review the amounts that transferred to the Form 140-SBI.

3. Review and compare

  1. Review the amounts on Form 140-SBI lines 59-66 and Form 140 Lines 60-80 to see what the tax and refund/amount owed are when using the Form 140-SBI.
  2. Compare this to the amounts you reviewed in step 1 before activating the Form 140-SBI.
    • If the Form 140-SBI is a better method of filing, no additional changes are needed to the return. If you are e-filing Arizona the Form 140-SBI will be included in the e-file transmission.
    • If the taxpayer benefits using the Form 140 without the Form 140-SBI uncheck Form 140-SBI: Small Business Income Tax Return (Resident) on the Arizona Information Worksheet.
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