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Double Taxation

By IncNow | Published October 19, 2013

The term used to describe the taxing of C-Corporation’s earnings at both the corporate level, and again to the shareholder personally when shareholder dividends are distributed. In practice few small business C-corporations pay double tax because most pay reasonable salaries that reduce the taxable income to less than $50,000, which is only a 15% tax rate. Then the funds are often borrowed out to avoid paying dividend taxes.

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