When wanting to open a company it is always a great idea to start thinking of the differences and benefits each type of corporation can have on your business. Today two of the corporations we will be focusing on is S corporations and C corporations!
What are the differences?
The differences are that S Corporations do not pay any income tax as a corporation instead the taxes go into the business owners personal tax return. S Corporation shareholder have restrictions. They have a limit of one hundred shareholders, and they can only be US citizens or residents.
C Corporations on the other hand must apply for a corporate tax return that can lead to double taxation. C Corporations can have as many shareholders as they want without having them be from the US.
What are the benefits?
The benefits to each of the corporation are different. An S corporation protects its stockholders by protecting their personal assets. Another benefit is that owners of S corporations have is that they can reduce self-employment deductions on their S corp. This is done by making some the income received salary or distribution. The advantages of a C corporation are that when it comes to shares, they have many different classes. They are also the only corporation that can deduct charitable contribution as an office expense.
When trying to figure out what will be the best way to open your business think of all the differences and the benefits it can bring to you and the company. If you need help in trying to figure out which will be best for you contact us, we can help you decide. Stay tuned for the next blog post where we will be speaking about how S corporations need to provide their employees with reasonable compensation.
The IRS states S corporations are audited more because they want to make sure that S corporation employees are getting reasonable compensation.
Accounting and Controller Services
Tax Planning and Preparation
Business Advisory
Privacy Policy | Terms and Conditions | Powered by Cajabra
At NeatBooks, we know you want to focus on growing your business without the stress of messy books, missed deadlines, or worrying if you’re leaving money on the table. The problem is, financial complexity and unreliable support from previous accountants can leave you feeling stuck, overwhelmed, and vulnerable to costly mistakes.
It doesn’t have to be this way! Every entrepreneur deserves a financial partner who simplifies the chaos, provides proactive guidance, and empowers them to make confident decisions.
With over 300 businesses transformed and a team that speaks your language (no jargon, just straight talk), NeatBooks combines expert financial strategies with a personal touch. We’re here to turn complexity into clarity and help you Prosper Neatly™.
Here’s how we do it:
Step 1: Schedule a Discovery Call - Let’s understand if we are a good fit, first. Then, we’ll move
into an assessment of where you are and what actions we need to take together to help you gain
clarity and financial organization.
Step 2: Strategize & Optimize - Together, we build a plan customized for your business and
your goals, and we execute.
Step 3: Prosper Neatly™ - You gain the confidence that comes with having a reliable, competent
partner managing the financial side of your business.
Let’s get started by scheduling a Discovery Call today. In 15 minutes, you’ll know how we can impact your business.
In the meantime, we invite you to download any of our free resources that have been built to support entrepreneurs in the food service, construction, and real estate development and investment spaces