When completing Form 5471, you may also need to submit Schedule I-1 to report income the controlled foreign corporation earned from intangible assets. The regulations surrounding global intangible low-taxed income (GILTI) can be confusing, so make sure you understand the requirements of this unique tax form. This article aims to clarify the requirements of From 5471 Schedule I-1, ensuring you stay compliant.
Form 5471 Schedule I-1: Key Takeaways
- A U.S. person who controlled a foreign corporation during its annual accounting period (Category 4 filers) and a US shareholder who owned stock in a foreign corporation that was a controlled foreign corporation at any time during the corporation’s tax year ending with or within the U.S. shareholder’s tax year and on the last day of that year (Category 5) must file Schedule I-1 along with Form 5471.
- Income statements in the foreign corporation’s functional currency and financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) are needed to submit Schedule I-1.
- On the same date you submit your annual tax return, you must submit your Schedule I-1, a component of Form 5471.
Who needs to file Schedule I-1?
Depending on the taxpayer’s relationship with the foreign corporation, Form 5471 filers fall into several categories: 1a, 1b, 1c, 2, 3, 4,5a, 5b, and 5c. Each category has different filing requirements.
Filers in the following categories need to submit Schedule I-1 along with Form 5471:
- Category 4 Filers: This category includes a US person who controlled a foreign corporation during the foreign corporation’s annual accounting period. If a person holds more than 50% of the total value or voting power of all classes of stock, they are deemed to have control over a foreign corporation.
- Category 5 Filers (this includes Categories 5a, 5b, and 5c): A Category 5 filer is a US shareholder who held stock in a foreign corporation that was a controlled foreign corporation (CFC) at any time during the corporation’s tax year, which ended with or within the US shareholder’s tax year, and who owned that stock on the last day of that year.
What is Schedule I-1, Information for Global Intangible Low-Taxed Income, used for?
Schedule I-1 of Form 5471 is used to report information for global intangible low-taxed income. GILTI refers to income a controlled foreign corporation earns from intangible assets that can be easily shifted overseas, such as intellectual property.
CFC’s US shareholders use the information in this schedule to file Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), and it may also help them complete Form 1118 or Form 1116, as applicable.
When is the due date for Schedule I-1?
As a part of Form 5471, Schedule I-1 has the same deadline as your annual income tax return. This means that partnerships and S-corps must file by the 15th day of the third month following the end of the tax year. C corps must file by the 15th day of the fourth month following the end of the tax year. Additionally, you may file an extension to postpone the deadline by up to six months.
Where is Form Schedule I-1 filed?
File Schedule I-1 as part of Form 5471 and your federal income tax return via the IRS website or mail.
Where do I find the newest version of Schedule I-1?
The latest version of Schedule I-1 is available for download on the IRS website.
How do I find the instructions for Schedule I-1?
The IRS website provides instructions and other details on Form 5471 and Schedule I-1.
What documents are required to file Schedule I-1?
To file Schedule I-1, you will need to submit an income statement in the foreign corporation’s functional currency. Financial statements must comply with U.S. Generally Accepted Accounting Principles (GAAP).
Are there any tax deductions for Schedule I-1?
Schedule I-1 of Form 5471 is for informational purposes only. You cannot claim tax deductions using this tax schedule.
Do you have any tips for filing Schedule I-1 correctly?
Before completing Schedule I-1 of Form 5471, ensure you fully understand your filing obligations. Many taxpayers confuse Form 5471 and Form 5472, so it is critical to determine which form is required. If you are indeed required to file Form 5471, be sure to confirm that you fall into one of the categories of filers who need to submit Schedule I-1.
When completing Schedule I-1, ensure your foreign corporation’s income statement is prepared correctly.
Can I get a refund by filing Schedule I-1?
You cannot use Schedule I-1 to calculate or claim a tax refund. The purpose of Schedule I-1 is to report certain types of overseas income to the IRS.
Can Cleer Tax help me file Schedule I-1?
Yes, we are here to help! Filing Schedule I-1 of Form 5471 can complicate the already complex process of doing business abroad. The expert accountants at Cleer are standing by to help take the hassle out of meeting your business tax requirements. Learn more about our pricing for filing Form 5471. If you have further questions or need assistance, feel free to contact us.
