How Are Corporations Taxed Twice?
There are two types of corporations in the United States. One is known as an S Corporation and the other is the C Corporation. Most corporations today fall under the C category. This category is not just for big businesses either. Small businesses can also be formed as a C Corporation. Usually a C Corporation has a lot of shareholders while an S Corporation does not. If you do decide to form a C Corporation you will be subject to paying a double tax on your profits but if you are the only shareholder or the other shareholders of the company are also employees you can avoid this. First off you need to know how the double taxation system works. The government and the IRS consider C Corporations separate taxpaying entities. Just like you they have a number assigned to them like your social security number. A corporation is identified by its employer’s identification number or EIN. This number is used on all the tax documents you file and payments that are made to the IRS. As a C Corporati
