![]() Corporations may be subject to foreign income taxes, and may be granted a foreign tax credit for such taxes. Shareholders of a corporation are taxed on dividends distributed by the corporation. These include most formations and some types of mergers, acquisitions, and liquidations. Some corporate transactions are not taxable. Groups of corporations controlled by the same owners may file a consolidated return. They must make quarterly estimated tax payments. Like individuals, corporations must file tax returns every year. The corporate Alternative Minimum Tax was also eliminated by the 2017 reform, but some states have alternative taxes. Taxable income may differ from book income both as to timing of income and tax deductions and as to what is taxable. State and local taxes and rules vary by jurisdiction, though many are based on federal concepts and definitions. Since January 1, 2018, the nominal federal corporate tax rate in the United States of America is a flat 21% following the passage of the Tax Cuts and Jobs Act of 2017. Effective corporate tax rate Corporate effective tax rateĬorporate tax is imposed in the United States at the federal, most state, and some local levels on the income of entities treated for tax purposes as corporations.
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