Mike owns a small but successful coffee house. He decides to incorporate. Considering only tax benefits, should Mike form a C corporation or a subchapter S corporation and why? Discuss taxation under both forms
Mike should form an S corporation in order to avoid double taxation. Any corporation not meeting the requirements for an S corporation is automatically a C corporation. A C corporation pays tax on the income generated by the business, and the shareholders pay tax on that same income when it is distributed as dividends. Some closely held corporations can avoid this double taxation by electing to be treated as S corporations. An S corporation is taxed as a pass-through entity. The corporation itself is not taxed on its income; rather, the shareholders pay tax on their pro rata shares of the corporation's income.
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Budget-planning approached include zero-based budgeting (ZBB), the Planning Program Budgeting System, and ___________ budgeting
Fill in the blank(s) with the appropriate word(s).
Since quality improvement programs are always needed, there is no reason to compare the costs of undertaking a quality improvement program to the costs of continuing without the quality improvement program
Indicate whether the statement is true or false