Taxation of Businesses Income from sole proprietorships and flow-through entities is taxed once at the individual owner level while corporate income is taxed twice once at the corporate level and again at the shareholder level upon dividend distributions or stock sales
Taxation Of Businesses • Income from sole proprietorships and flow-through entities – is taxed once at the individual owner level while corporate income is taxed twice, – once at the corporate level – and again at the shareholder level upon dividend distributions or stock sales
Define A Corporation a business entity with two or more owners is classified as either a corporation or a partnership a business entity with one owner is classified as a corporation or a sole proprietorship
Define A Corporation • A business entity with two or more owners is classified as either a corporation or a partnership • A business entity with one owner is classified as a corporation or a sole proprietorship
Define A Corporation a business entity is a corporation if it is organized under a federal or state statue that refers to the entity as incorporated or as a corporation If a business entity incorporates, it is a corporation
Define A Corporation • A business entity is a corporation if it is organized under a federal or state statue that refers to the entity as incorporated or as a corporation • If a business entity incorporates, it is a corporation
Define A Corporation If a business forms itself as a Partnership, Limited Liability Company (LLc) Or Limited Liability Partnership(lLP), the entity can elect to be taxed as either a partnership or corporation
Define A Corporation • If a business forms itself as a Partnership, Limited Liability Company(LLC) Or Limited Liability Partnership(LLP), the entity can elect to be taxed as either a partnership or corporation
Similarities of Individuals and Corporations Similar computation of taxable income Allowed to deduct ordinary and necessary business expenses Can deduct interest and depreciation
Similarities Of Individuals And Corporations • Similar computation of taxable income • Allowed to deduct ordinary and necessary business expenses • Can deduct interest and depreciation