How to Choose Between an S-Corporation and a C-Corporation

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Categories: How Tos
  • When you establish a corporation, you have a number of decisions to make. One of them relates to the tax treatment of the entity. When you set up a corporation, it will ordinarily be treated as a C corporation, which is a separate entity for tax purposes, paying taxes on its earnings, and distributing taxable dividends to shareholders. In some circumstances, shareholders may wish to forgo this treatment, and have all of the corporations earnings flow directly to them in the year they are earned. The decision is not a simple one. This guide will walk you through some of the issues around how to choose between an S-corporation and a C-corporation.
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    The content in this page is not a substitute for professional financial advice. Please contact your financial adviser before using the information presented here.