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S corporation vs. C corporation: Pros and Cons of Each.

What are the pros and cons of a S corporation vs. a C corporation.

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S corporation vs. C corporation, pros and cons of each-

1. Tax Brackets-
With an S corporation, all of the corporation's income flows right onto the personal (1040) returns of the shareholders, pushing them up into higher tax brackets. A C corporation has its own progressive tax rate structure, ranging from 15% on the first $50,000 of net income, to as much as 39%.

2. Income Taxed-
With an S corporation, the shareholders are required to pay income tax on their share of the corporation's income whether they take any money out of the corporate account or not.

3. Deductions-
The Section 179 expensing election is much more lucrative for owners of C corporations because they can literally multiply their total ...

Solution Summary

This posting analyses the pros and cons of an S corporation vs. a C corporation.