What is the difference between a C-Corp and an S-Corp?
“C-Corp” and “S-Corp” refer to the subchapters of the IRS code. C and S corporations are distinguished by how their income is reported and taxed. A C-Corp is an entity that may be subject to double taxation from the IRS. A C-Corp is taxed on the revenues it generates and then again on an individual shareholder level when dividends and interest are distributed. Conversely, in an S-Corp there are no federal taxes. This is why an S-Corp is a pass through tax entity. Income generated by an S-Corp is passed directly to its owners and only taxed once on an individual tax level.
