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Corporation type

Asked by: tayemcf  — 1 October, 2011

What is the difference between a C Corporation and a S Corporation and how do I know/find out what type I have?

Answered by: admin  — 1 October, 2011

Dear Visitor,

C-Corporation is a regular corporation taxed by default first on a corporate level and then on the shareholder level when the dividends are distributed.

S-Corporation is a corporation that elected to be taxed as such by filing Form 2553 with the IRS. In general, S corporations do not pay any federal income taxes. Instead, the corporation’s income or losses are divided among and passed through to its shareholders.

You would know if your corporation is an S-Corporation by looking at your corporate tax return (or inquiring with your accountant, who filed your last corporate tax return).

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