An S-corporation Can Save You Thousands (At Least) In Taxes

Date Added: Feb 2010
Format: HTML

If you have ever wondered about the differences in incorporating your small business as either a C-corporation or an S-corporation, pay attention. What follows could save you thousands, if not millions, of dollars if you ever decide to sell your business. The basic difference between the two business entities really comes down to taxes. C-corporations pay a corporate tax on their earnings, and their shareholders pay a personal tax on whatever dividend income they receive. S-corporations, which are also known as flow-through entities, pay out earnings as dividends to their shareholders, who then pay a personal tax on the income they receive.