A C corporation (or “C corp.”) is a corporation in the United States that, for Federal income tax purposes, is taxed under 26 U.S.C. § 11 and Subchapter C (26 U.S.C. § 301 et seq.) of Chapter 1 of the Internal Revenue Code.[1] Most major companies (and many smaller companies) are treated as C corporations for Federal income tax purposes.
C corporation vs. S corporation
Although the income of a C corporation is taxed, the income of an S corporation (with a few exceptions) is not taxed under the Federal income tax laws.
Unlike corporations treated as S corporations, a corporation may qualify as a C corporation without regard to any limit on the number of shareholders, foreign or domestic.
Steps to forming a C corporation
- 1. Choose an available business name that complies with your state’s corporation rules.
- 2. Appoint the initial directors of your corporation.
- 3. File formal paperwork, usually called “articles of incorporation,” and pay a filing fee that ranges from $100 to $800, depending on the state where you incorporate.
- 4. Create corporate “bylaws,” which lay out the operating rules for your corporation.
- 5. Hold the first meeting of the board of directors.
- 6. Issue stock certificates to the initial owners (shareholders) of the corporation.
- 7. Obtain licenses and permits that may be required for your business.
Taxable income list
| Taxable Income ($) | Tax Rate | Deduction ($) |
|---|---|---|
| 0 to 50,000 | 15% | 0 |
| 50,000 to 75,000 | 25% | 5,000 |
| 75,000 to 100,000 | 34% | 11,750 |
| 100,000 to 335,000 | 39% | 16,750 |
| 335,000 to 10,000,000 | 34% | 0 |
| 10,000,000 to 15,000,000 | 35% | 100,000 |
| 15,000,000 to 18,333,333 | 38% | 550,000 |
| 18,333,333 and up | 35% | 0 |
[edit] Notes
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