Quote:
Originally Posted by elka
hi Taxmaster,
I have a question for you, as it seems you are very well informed about tax issues:
How is it with corporations? Are they obligated to file taxes every year, or is there maybe some kind of requirement for corps to do so? (some level of earnings or so).
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There are 2 types of corporations, a regular "C" corporation and an "S" corporations. both are required to file returns every year. the "C" corporation has tax rates just like an individual has, the more they net after deductions, the higher the percentage of tax they must pay. the united states has some of the highest corporate taxes in the world.
the "S" corporation pays no tax but must file a tax return every year. the shareholders are listed and each shareholder vmust report their percentage of net income on their personal tax return and pay tax on it. an example would be if the corporation made a profit of $15,000 and you were a 10% shareholder (you owned 10% of the outstanding shares) you would need to include 10% of $15,000 or $1,500 of additional income on your personal tax return. these types of corporations have few shareholders and are usually owned by family members.
corporations have no secret deductions that are not available to any individual operating as a sole proprietor. I hope this helps.
Namaste'