For many people dreaming of starting their own business, nothing can be better than the makeshift to independent work than what online has done in these years. With online marketing, setting up a business has become easy and many workers are considering being independent in the next 2 to 3 years. C Corporations are the corporate entities running separately from their owners. If you are the individual owner of the C corporation, you are not just the owner of the company but the majority shareholder as well. It is a kind of quick corporation that is ideal for the workers wanting to take benefits of tax deductions.
Benefits of C Corporations
- Deducting all the fringe benefits
With C corporation, it is easy to deduct certain fringe benefits like dental, vision, etc. and they are exempted from paying the taxes the moment they receive the benefits. But in the case of S shareholders, the reports are first shown as benefits deducting which the gross premiums are deducted from personal returns only leaving the net benefit to be zero.
- Considered as Limited Liability Corporation
Having a separate legal identity and corporate liability is what is the most valid reason to be part of a quick corporation. The liability status is limited compared to the percentage of the company that you are owning. It leads to the separation of personal assets from professional assets in case of the company that is ever been sued.
- Using of vehicles to reduce taxability
All the self-employed individuals like partners, LLC sole proprietors, etc. need to pay their tax for covering of FICA. All the C corporations are subject to corporate tax but the liability is not considered to be high. If the corporations are paying dividends, then these are subject to all the corporate-level income tax.
- Reducing of audit risk
C Corporations are not likely to be audited by IRC as compared to the LLC or the sole proprietorship. But you should always know that you are drawing the letter of the law by keeping the appropriate records in the event of making the audit, you are proving to be operating compliantly.
- Easy growth
Having the status of C Corporations, adding of the employees is a process. But the IRS looks at this separately as they are subject to the cause of double taxation. The profits are viewed at the corporate level and in the second time, they are distributed as dividends to the shareholders.
Structuring of the business can work wonders in the future both in the literal and figurately. C Corporations are great and it also needs auditing just like all regular companies.