Instant answers. What can we help you with?
How is a C Corporation Taxed?
Unlike many other business entities in which the profits pass through to the owners’ personal tax return (e.g. LLCs, S Corporations, etc.), the C Corporation is a completely separate taxable entity. The C Corporation pays federal taxes on the net profits (after all expenses, including salaries and bonuses) of the business by filing the 1120 form with the IRS.
The after tax profits can be paid out to the owners (shareholders) in the form of dividends, or retained for reinvestment of the business. The first $50,000 of net income is only federally taxed at 15% rate, and the next $25,000 is taxed at a 25% rate. Different states have different rules on how they tax corporations.
More answers to your questions
How our service works
Take a moment to view our instructional video and see how easy it can be to get your business incorporated.
Helpful tools for decision making
Select your business type to see how Incfile can work for you.