Tag: corporate tax

Corporate Taxes

Debt vs. Equity?

How is your practice set up?

Is it a C corporation, or a flow through entity, S corporation, Limited Liability, or Partnership?  Or are you a sole proprietor?

If a C corporation, the reason this simple question is important, is that payments of dividends are not deductible by a corporation, but the payments of interest are deductible.  Therefore, the payment of interest reduces corporate taxable income, and corporate income tax, whereas the payment of a dividend, being non deductible does not decrease corporate taxable income and does not reduce corporate income tax.

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