Taxes, Lawyers, Business & Debt
Corporate Income And Franchise Taxes
To operate in the United States, every corporation has to be aware of the two sets of income tax law that it falls under. As an entity separated from its owners, a corporation is assessed both state and federal income tax. Every state in the United States has different tax laws for corporations and businesses, so corporate owners must wisely choose the state in which they will do business. This brief guide will list some of the state and federal taxes that corporations are liable for.
The Federal Income Tax
America's IRS (Internal Revenue Service) is there to create and enforce laws concerning the taxation of corporate income. The IRS' website contains the most up to date federal tax information available. The US government assesses income tax on corporations on a percentage basis, and this year, a corporation making up to $50,000 per year will pay fifteen percent in income taxes. The percentage paid increases as the corporation's income does, up to a 35% maximum.
The State Income Tax
These aren't as clearly defined as federal income taxes, because each state in America assesses its own corporate taxes. Each state's secretary of state will have corporate tax information and all the appropriate forms on their website. There are some states, such as Nevada, that don't have an income tax, and other states use either a sliding scale or a flat tax on corporate earnings.
Franchise Taxes
While they are not officially known as income taxes, some states assess a franchise tax that's income based. It can be instead of, or in addition to that state's income tax. In Delaware, there's a franchise tax that is based on the amount of shares a corporation has (which correlates with their income). As of this year, the tax can range from seventy-five dollars up to a maximum amount of $180,000. Some of America's states charge a flat franchise tax, while other states in the union have none at all.