Tax Services for C-Corps
In Phoenix, Arizona

C corps pays taxes at the corporate level. Meaning, shareholders/owners may be subject to the disadvantage of double taxation. Profits from the business are taxed at both corporate and personal levels. In other words, the corporation will pay taxes on its profits, and dividends distributed to shareholders will also be taxed. 

C-corps are taxed at a flat 21 percent on operational profits. Individual income tax rates are progressive and can be as high as 37 percent. The dividend tax rate can be from 15 percent up to 20 percent. The tax implications of a C corporation are more complex compared to other business structures. In fact, Operating a business as a corporation may come with additional complexity but it may also provide a broad array of tax planning opportunities across the business life cycle. Discussing the tax implications of the different types of a corporation with your trusted tax advisor will help you decide better which one is best for your business objectives. 

Benefits of a C Corporation

Limited liabilities. One of the best advantages that a C corp offers is liability protection. In other words, because a corporation is a separate entity, its debts, responsibilities, and liabilities are on its own. Shareholders are liable up to the amount they have invested in the corporation but their personal assets are completely separated from the corporation. 

Unlimited Investors gives more potential chance of growth. Expanding a business can be costly but as a C corporation, you can have as many investors as are willing to purchase a percentage of your company. Additionally, C corporations are known to attract investors easier as well as obtain capital through equity financing.

Unlike the S corp that is only allowed with limited shareholders, C corps are allowed to have over a hundred shareholders. Those shareholders can be other entities or individuals. And, international or domestic shareholders are allowed. 

Other benefits of C corps also include; Ability to offer stock options, provide multiple tax planning opportunities, and more.

Disadvantages of a C Corporation

Double taxation is probably the biggest downside of a C corp. However, with the help of a professional tax expert, possible adjustments, deductions, and valuable tax tips will be overlooked. A competent professional accountant in business is an invaluable asset to the company.  Other downsides of a C corp are its complexity, bureaucracy, and expense. 

Big companies such as Apple, Macdonald’s, and Starbucks belong to the C Corporation business structure. These are huge businesses that grew quickly from scratch. Every business structure provides great benefits for the right business and if it’s carefully studied and executed. 

The C corporation structure is complex and all corporations are governed by state and federal statutes, which means that they have to strictly follow corporate laws by the government. Therefore, professional help from lawyers and accountants must be needed.