How Do Businesses Pay Income Taxes?

How do businesses pay income taxes? Learn how different businesses pay their income taxes. It depends on the type of business structure; whether it's a corporation and then with a corporation you've got...

It depends on the type of business structure; whether it's a corporation and then with a corporation you've got a C-Corp and an S-Corp. A C-Corp basically pays income taxes themselves, whereas with a S-Corp the income flows through to the owners and the owners pay income taxes directly. With a C-Corp, if the owners are taking a salary then pay roll taxes were deducted out of their paycheck just like an employee. But the corporation also pays income taxes whereas with the S-Corp doesn't pay income taxes, the individual owners have to pay the tax. They file based on the type of the business, and based on their year end date. Most of them end December 31. A business has a lot of deductions and that's why a lot of big businesses don't pay taxes. Their taxes get different rates. An individual most of the time has their taxes withheld from their paycheck and those are called 941 taxes.

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