Corporate Double Taxation
corporate double taxation
Why Would you Choose an S Corp over a C Corp?
Considering that double taxation only applies if you issue dividends, if you don’t plan on issuing dividends, what would anybody choose an S Corp over a C Corp?
As I understand it, profits by S Corps pass through to the owner’s Personal Income Taxes. So if your business earns $379,150+, you’ll be taxed at 35%. Whereas Corporate Tax Rates from $335,000 to $10,000,000 are taxed at 34%.
So why would anybody choose an S Corp for a small business and be taxed at 35%, when you can choose a C Corp and only pay 34%?
C-Corps that are profitable yet don’t issue dividends attract attention from the IRS.
While the IRS reviews the salaries of S-Corp owners to make sure that their salaries are not too low, it also reviews the salaries of C-Corp owners to make sure that they are not too high.
Benefits of a UK Company
