Читать книгу Run Your Own Corporation - Garrett Sutton - Страница 38

• Files IRS Form 1120.

• Balance sheet required on tax return.

• Must use double-entry bookkeeping system.

• Corporation must file all necessary employment tax returns.

• Pays tax on all profits. When shareholders take profits as dividends, distributions are taxable on shareholder’s tax returns (double taxation).

• Some C corporations are defined as personal service corporations (such as professional corporations for physicians) and these are generally taxed at a higher rate.

• Tax elections are at corporation level.

• Allocation of income/deductions not permitted.

• Tax responsibility does not flow through to individual shareholder level.

• Shareholders who work for the corporation are considered employees (shareholder-employees) and need to draw a reasonable salary which is subject to payroll and withholding taxes. Dividend distributions, however, are not subject to social security tax.