c corp vs. flow through

"~^ beancounter ~^" wrote

"S" corp profits, are subject to income tax, but are not subject to payroll or self-employment tax. They are however, at up-to the maximum individual tax rate.

LLC profits are taxed for both income and self-employment tax, up to the maximum tax rates.

C corp profits are taxed at teh corporate rates, and again if drawn out as dividends by the shareholder, but dividends are taxed at a max 15% rate.

I think one advantage of a c-corp over an s-corp is that the c-corp has less limitations on the types of shareholders it can have. For example, I think another corporation can be a c-corp shareholder but not an s-corp shareholder. And, I am not sure, but I think an s-corp can have only one class of stocks, but a c-corp can have different classes of stocks.

Here's a link that talks about some banks switching from a c-corp to an s-corp:

P.S. Here's another link on the subject. Scroll down to the second answer.

thanx Paul & Frank for the info...the pr tax comments helped ... as well as the links.....

I'd strongly suggest you discuss this with your accountant and attorney. If you don't have either you need to hire an accountant to determine which entity is the best fit for your business and needs. There are advantages and disadvantages of each and you cannot really get the information you need to make such an important business decision from a newsgroup.

I've been in public accounting working with small and large businesses for over 27 years and now work for a PTC, so I have some experience in this.

Hope this is helpful,

Stephen Lewis, CPA