A Standing For Taxes - Part 1: Difference between revisions
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Latest revision as of 12:24, 3 September 2026
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A C Corp pays tax depending on its profit for last year and then any dividends paid to shareholders is also taxed. Hence the term double-taxation. An S Corp however works differently. The S Corp pays no tax on profits. The money flows right through to the shareholders who then pay tax on cash. The big difference discover that the 15.3% self-employment tax does not apply. So, by forming an S Corporation, your saves $3,060 for the year just passed on earnings of $20,000.
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