Why Form a Corporation in New York?

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Fees and Taxes for Your New York State Corporation

You’ll need to pay certain taxes and fees for your New York S Corp or C Corp. We’ve included the more common ones below.

Common Fees for a New York Corporation

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Taxes Payable by Your New York Corporation

The way that New York S Corporations and C Corporations pay taxes is different. We’ll take each one separately.

Taxes Payable by Both S Corporations and C Corporations in New York

Taxes Payable by New York S Corporations

Self-Employment Tax

Because your New York corporation income flows through to your personal tax return, you must pay self-employment tax (also known as FICA, Social Security or Medicare tax) on your earnings. This is typically at a rate of 15.3 percent. You will be able to deduct your business expenses from your income when working out how much self-employment tax you owe.

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You will be able to deduct your business expenses from your income when working out how much self-employment tax you owe. Here are some examples of how much self-employment tax you may need to pay, depending on your earnings:

  • On profits of $20,000, you would pay self-employment tax of $3,060
  • On profits of $50,000, you would pay self-employment tax of $7,650
  • On profits of $90,000, you would pay self-employment tax of $13,770
  • On profits of $140,000, you would pay self-employment tax of $21,420

In some cases, part of the income from an S Corporation can be paid as a “distribution” rather than “salary,” so it would not be subject to self-employment tax.

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Taxes Payable by New York C Corporations

Corporation Tax

New York C Corporations must file corporate tax returns with the IRS and pay corporation taxes on their profits. Shareholders must also pay tax on dividends received from a New York C Corporation, which does result in “double taxation.”

Stock Dividends From C Corporations

A New York C Corporation may pay shareholders dividends as a share of the profits of the company. The value of dividends that each shareholder is entitled to depends on how many shares they own.

Dividends that are distributed to shareholders are taxed twice: first at the corporate level as profit (on the corporation’s Form 1120) and again at the individual level as stock dividends (on the shareholder's Form 1040).

Taxes Payable by All Individuals Working for New York Corporations

Pay Federal Income Tax on New York Corporation Earnings, Dividends and Distributions

You will need to pay regular federal income tax when you file your tax return every year.

Ready to Start Your New York Corporation?

Incfile provides a cost-effective service to help you create your New York corporation. We guide you through the process and handle most of the administrative steps, such as filing the necessary forms on your behalf.

Our basic package also provides a free Registered Agent service for the first year. If you're looking for help starting an S Corporation or C Corporation, our comprehensive services provide outstanding value.

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Filing Time and Price

The state charges this amount to file a new business entity. This fee goes directly to the Secretary of State.

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Compliance Requirements

This report is mandatory and must be filed within the specified time frame in order for the entity to remain in good standing with the state. Failure to file this report can lead to the company being revoked or administratively dissolved.

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