Tax on Corporate Income

Corporate Tax

Corporate tax is different from what an individual tax would be. However, corporations and individuals must pay both state and local taxes. Some examples of the different taxes corporations pay include:

Payroll Tax

Real Estate Tax

Franchise Tax

Excise Tax

Income Tax (business income)

Corporations also must take into account any shareholders or partnerships that dividends may be distributed to. Businesses and corporations are formed in the following classifications:

Sole Proprietorship - a business owned by one person, who takes responsibly for all obligations. All of the profits are taxed.

Partnership or LLC - an association run by two or more entities and share responsibility. Law varies from state to state and can be quite confusing.

S Corporation - also known as a Subchapter S Corporation, This is taxed like a partnership, but has the benefits of an incorporation. The shareholders pay the taxes and the corporation is exempt from paying income tax.

C Corporation - a business that is completely separate entity from its owners. This is taxed on a gradual percentage increase. Shareholders are taxed as income.