vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"This is the best tl;dr I could make, [original](http://www.epi.org/publication/corporations-pay-between-13-and-19-percent-in-federal-taxes-far-less-than-the-35-percent-statutory-tax-rate/) reduced by 81%. (I'm a bot) ***** &gt; Despite some recent claims to the contrary, a recent CBO report doesn&amp;#039;t overturn, but rather bolsters the research showing that corporations pay less than a 35 percent tax rate.  &gt; Comparison of statutory U.S. corporate tax rate and three estimates of what corporations actually pay on average.  &gt; Multiple studies with distinct methodologies have found effective federal corporate tax rates that range between 13 and 19 percent- far smaller than the rate corporations are supposed to pay.   ***** [**Extended Summary**](http://np.reddit.com/r/autotldr/comments/6sx0c3/corporations_pay_between_13_and_19_percent_in/) | [FAQ](http://np.reddit.com/r/autotldr/comments/31b9fm/faq_autotldr_bot/ ""Version 1.65, ~188170 tl;drs so far."") | [Feedback](http://np.reddit.com/message/compose?to=%23autotldr ""PM's and comments are monitored, constructive feedback is welcome."") | *Top* *keywords*: **Tax**^#1 **corporations**^#2 **loophole**^#3 **rate**^#4 **deferral**^#5"
For 2014/15 it looks something like this:  To make it a bit clearer, let's also plot the difference in net income for self-employment and a single person company compared to employment:  Self-employment is slightly worse between £5885 and about £10,500 because Class 2 NI kicks in before the employed person starts paying any tax. After that, self-employment is better because you pay 9% Class 4 NI rather than 12% Class 1 NI. Once higher rate tax kicks in, the saving stops growing. The single-person company is most tax-efficient at all points, ignoring any accountancy costs it incurs. Strange things happen between £100k and about £135k because the withdrawal of the personal allowance kicks in at a different point when receiving dividends. We can also plot the percentage of income paid as tax for each case:  The strange kink for self-employment below £10k is caused by Class 2 NI again. Employment and self-employment both gradually tend towards paying 47%, reaching 46.5% for £2m gross income. The company tends towards 44.44%, reaching 43.6% for £2m gross income.
These are all factually correct claims. S-Corporation is a pass-through entity, so whatever gain you have on the corporate level - is passed to the shareholders. If your S-Corp has capital gains - you'll get your pro-rata share of the capital gains. Interest? The same. Dividends? You get it on your K-1. Earned income? Taxed as such to you. I.e.: whether you earn income as a S-Corp or as a sole proprietor - matters not. That's the answer to your bottom line question. The big issue, however, is this: you cannot have more than 25% passive income in your S-Corp. You pass that limit (three consecutive years, one-off is ok) - your S-Corp automatically converts to C-Corp, and you're taxed at the corporate level at the corporate rates (you then lose the capital gains rates, personal brackets, etc). This means that an S-Corp cannot be an investment company. Most (75%+) of its income has to be earned, not passive. Another problem with S-Corp is that people who work as self-proprietors incorporated as S-Corp try to abuse it and claim that the income they earned by the virtue of their own personal performance shouldn't be taxed as self-employed income. IRS frowns upon such a position, and if considerable amounts are at stake will take you all the way up to the Tax Court to prove you wrong. This has happened before, numerously. You should talk to a licensed tax adviser (EA/CPA/Attorney licensed in your state) to educate you about what S-Corp is and how it is taxed, and whether or not it is appropriate for you.
No. There's no personal responsibility per se if you set up a corporation, but if you don't have a track record a creditor will likely insist that you personally guarantee the debts of the corporation. Beyond that, personal responsibility would be the result of a piercing of the corporate veil, which is something the courts are unlikely to do unless there is indicia of fraud or the like. There are also some statutory provisions that can lead to personal liability of a corporation's directors (e.g. unpaid wages), but I don't think that's really what this thread is getting at.
"Has anyone ever proposed significantly lowering the US corporate tax while simultaneously raising dividend taxes for high income earners? Hell, many economists believe that corporate income should be taxed at 0%. If you do this but are worried about ""teh evil corporations"" becoming too big and powerful, that's what a high tax on dividend income is for. You can't personally become rich from a corporation without earning dividend or salary income from a corporation's coffers."
I am quite aware that corruption goes beyond cash.  I was merely pointing out that most tax incentives are not a literal, real-time transfer of money from the tax payers to the corporations.    I have had quite a few discussions with people about this and some folks think that their tax dollars are literally being transferred form their paycheck withholdings to a company's bank account and that is not exactly true.  It sounds like you understand the difference but some do not.
I'm not being clear enough. I'll try a different tack.  What sits *behind* the concept of corporate personhood that gives it such flexibility to pick and choose what parts of natural personhood they want? Bar them from financial involvement in politics? Oh no, that would violate their First Amendment rights, *just like a natural person being muzzled*, can't have that!  Write off expenses before paying tax on remaining income? Oh yes, we definitely must keep that, nevermind that a natural person isn't treated like that.  Okay, so there is a huge difference between corporate and natural personhood. Even with a [history of corporate personhood](http://www.npr.org/2014/07/28/335288388/when-did-companies-become-people-excavating-the-legal-evolution), what I'm missing is a walk through of the arguments that established the collective rights of an assemblage of natural persons rises to the level where those rights must be secured the same as a natural person. In layman terms, what steps were used to reach that conclusion? Without going to law school and then slogging through the actual historical decisions?
"Although they may have some similar functions, CPAs and Enrolled Agents operate in two rather different areas of the accounting ""space."" CPAs deal with financial statements, usually of corporations. They're the people you want to go to if you are making an investment, or if you own your own business, and need statements of pretax profit and loss prepared. Although a few of them are competent in taxation, the one thing many of them are weak at is tax rules, and this is where enrolled agents come in. Enrolled agents are more concerned with personal tax liability. They can 1) calculate your income taxes, and 2) represent you in hearings with the IRS because they've taken courses with IRS agents, and are considered by them to be almost ""one of us."" Many enrolled agents are former IRS agents, actually. But they are less involved with corporate accounting, including things that might be of interest to stock holders. That's the CPA's province."
The difference is when the companies can make their own loop holes via  legislation that they propose and get passed.  You can make a law that only effects only one company or circumstance.  Apple could sponsor a law that allows a 5% tax rate on companies that run digital downloads, sell over 5 flat screen devices, incorporated in Northern California and named after a fruit.
You'll then have to pay personal income taxes on the income, at the dividend rates. But for as long as the money was invested inside the corporation, it was subject only to lesser corporate tax rates, not higher personal income tax rates. Hence the ""partial"" aspect of this kind of tax shelter. Or, if you're lucky enough to find a buyer for your corporation, you could qualify for the Lifetime Capital Gains Exemption on proceeds up to $750,000 when you sell a qualified small business corporation. This is the best exit strategy; unfortunately, not an easy one where the business has no valuable assets (e.g. a client base, or intellectual property.) * The major sticking-point: You need to have real business revenue! A regular employee (of another company) can't funnel his personally-earned employment income into a corporation just to take advantage of this mechanism. Sorry. :-/"
I am guessing that you don't understand that even a 100% tax bracket doesn't actually equal you paying 100% of your profits in taxes. This is why the use, while having a 35%messaging corporate tax rate, only sees less than 20% in an average effective corporate tax rate... In the same vein, if a company paid taxes on what profits were created within a countries borders, that would be a fairly accurate method of calculating every country's fair percent of revenue from that company and the amount of infrastructure that were utilized by that company within that country's borders.  And it still wouldn't add up to anywhere near 100% of that company's net profits...
There are two totally different things: There is your limited company, and there is yourself.  Your limited company will absolutely have to pay 20% corporation tax on all its profits. The profits are the income of the limited company (you say it's £5,000 a year) minus all expenses. Usually you would pay yourself a salary, which immediately reduces your profits. And of course the payment to the accountant will reduce the profits.  If the limited company is your only source of income, the usual method is to pay yourself £10,600 salary a year, possible pay money into a pension for yourself which is tax free and reduces the company's profits, pay 20% corporation on the rest, and pay yourself a dividend twice a year. Unless you have another job where you make a lot of money, you should have paid all that money to yourself as income and paid zero corporation tax.  And may I say that if you made £5,000 a year, then there is most likely not enough going on to justify that an accountant charges you £600. You should be able to find someone doing it cheaper; I cannot imagine that he or she had to do a lot of work for this.
"A tax return is a document you sign and file with the government to self-report your tax obligations. A tax refund is the payment you receive from the government if your payments into the tax system exceeded your obligations. As others have mentioned, if an extra $2K in income generated $5K in taxes, chances are your return was prepared incorrectly. The selection of an appropriate entity type for your business depends a lot on what you expect to see over the next several years in terms of income and expenses, and the extent to which you want or need to pay for fringe benefits or make pretax retirement contributions from your business income. There are four basic flavors of entity which are available to you: Sole proprietorship. This is the simplest option in terms of tax reporting and paperwork required for ongoing operations. Your net (gross minus expenses) income is added to your wage income and you'll pay tax on the total. If your wage income is less than approximately $100K, you'll also owe self-employment tax of approximately 15% in addition to income tax on your business income. If your business runs at a loss, you can deduct the loss from your other income in calculating your taxable income, though you won't be able to run at a loss indefinitely. You are liable for all of the debts and obligations of the business to the extent of all of your personal assets. Partnership. You will need at least two participants (humans or entities) to form a partnership. Individual items of income and expense are identified on a partnership tax return, and each partner's proportionate share is then reported on the individual partners' tax returns. General partners (who actively participate in the business) also must pay self-employment tax on their earnings below approximately $100K. Each general partner is responsible for all of the debts and obligations of the business to the extent of their personal assets. A general partnership can be created informally or with an oral agreement although that's not a good idea. Corporation. Business entities can be taxed as ""S"" or ""C"" corporations.
Wow 35% I never realized that the American corporate tax rate was so high.  In my province in Saskatchewan Canada I pay 13%(as the owner of a small corporate business).  It's no wonder American corporations want to move.   Does it not make more sense to lower the corporate tax rate while reducing loop holes etc... to make the American corporation more competitive.  Just my 2c
It's technically correct to say BK will still pay taxes on all profits made here in the US, the problem here is that it's very easy to structure this whole thing so that there are no US profits.   Company A sells itself to Company B, which it also owns. Company A transfers all its' intellectual property to Company B which then charges Company A a fee to use it. The fee is structured so that Company A makes zero profit and Company B makes all the money.
You clearly have no understanding of how the corporate tax code works, so I won't waste my time explaining it. Guess what, they do pay taxes...but lobbyists over the years have made it pretty easy for them to pay as little tax as possible. The logic is pretty clear: remove the special interest loopholes and tax corporations at a globally competitive rate (we have the highest corporate rate among developed countries), more companies shift their production back to America and don't store their profits in foreign holding companies with near 0 rates. More money flows back in to country, r&amp;d goes up, more jobs are created, more Americans are employed in meaningful jobs, wages go up, the govt makes up for  whatever lost corporate revenue with the increased personal income tax.
"As you said, in the US LLC is (usually, unless you elect otherwise) not a separate tax entity. As such, the question ""Does a US LLC owned by a non-resident alien have to pay US taxes"" has no meaning. A US LLC, regardless of who owns it, doesn't pay US income taxes. States are different. Some States do tax LLCs (for example, California), so if you intend to operate in such a State - you need to verify that the extra tax the LLC would pay on top of your personal tax is worth it for you. As I mentioned in the comment, you need to check your decision making very carefully. LLC you create in the US may or may not be recognized as a separate legal/tax entity in your home country. So while you neither gain nor lose anything in the US (since the LLC is transparent tax wise), you may get hit by extra taxes at home if they see the LLC as a non-transparent corporate entity. Also, keep in mind that the liability protection by the LLC usually doesn't cover your own misdeeds. So if you sell products of your own work, the LLC may end up being completely worthless and will only add complexity to your business. I suggest you check all these with a reputable attorney. Not one whose business is to set up LLCs, these are going to tell you anything you want to hear as long as you hire them to do their thing. Talk to one who will not benefit from your decision either way and can provide an unbiased advice."
If the business is legally separated and not commingled - they probably cannot. What they can do is put a lien on it (so that you cannot sell the business) and garnish your income. If the corporate veil is pierced (and its not that hard to have it pierced if you're not careful) - then they can treat it as if it is your personal asset. Verify this with a lawyer licensed in your state, I'm not a lawyer or a tax professional.
"First, I'm not a CPA or international tax accountant; my entire understanding of the French tax system is entirely from what I've read in places like the WSJ, Barrons, WaPo, etc. However, ***my understanding*** is that French tax law works something like this. Let's say France has a tax rate of 35%. First, it must be assessed where the controlling entity is. In this case, if the majority of production and labor, or if the corporation is primarily based in France, it would proceed as follows. Taxes are initially paid based on transfer pricing to the original local entity (this avoids ""double taxation""). So in the example above, you would pay 10% to India on the $3,000,000 in profits ($300,000). You would then reduce the 35% French tax rate by the 10% already paid. This means you would pay an additional 25% to France ($750,000). The premise is that you have an effective ""minimum"" tax threshold for being in France. In the case above, companies like GE would have to pay the difference (this doesn't get into tax breaks/shelters on previously recorded losses, etc.). Again, ***I AM NOT SURE ON THIS***. This is my basic understanding and am by no means a tax accountant/lawyer/etc. From what I understand; however, this hasn't necessarily been a good thing for France either (California is likely a similar case study with the Unitary return requirement). The fact is the world is very global nowadays. Its easier and cheaper for the companies to just leave instead of being forced to pay higher taxes... IMO, Germany hit it right on the head. Low corporate tax rates with high personal tax rates. This maintains a very business friendly environment (business move there because of the skilled labor and low corporate taxes), but they effectively pass the burden on to individuals (who also benefit from the pro-business environment).
I'm not sure why you think that it matters that the distribution goes to an S-Corp vs an individual tax payer. You seem to think it has any relevance to your question, but it doesn't. It only confuses your readers. The situation is like this: LLC X is deriving income in State #2. It has two members (I and S) residents of State #1. Members I and S pay all their taxes to State #1, and don't pay taxes to State #2. State #2 audited member I and that member now needs to pay back taxes and penalties to State #2 on income derived from that State. Your question: Does that mean that member S should be worried, since that member was essentially doing the exact same thing as member I? My answer: Yes.
In a simple case as the sole UK resident director/shareholder of a company, with that company as your only income, you are usually best paying yourself a salary of the maximum tax free amount allowed under your tax code (~£11k for most people at present).  On this you will have to pay some employer and employee National Insurance (NI) contributions (totalling around £1000). Your salary/employer NI counts as an expense, so that is taken off the company profits.  You then pay corporation tax on the remainder (20%).  The first £5k you take as dividends is tax free, the remainder at a lower tax rate than the equivalent combined income tax/NI (starting at 7.5% instead of 20% tax plus employee plus employer NI), giving a significant saving compared to salaried income even after corporation tax. To declare and pay the tax, you would need to complete a self-assessment tax return.  Your company will also need to file a return. The Contractor UK website, although aimed at IT contractors, has some very useful information on operating Ltd companies. That said, finances are rarely that simple so I would concur with the recommendation you engage an accountant, which is a tax-deductible expense.
"Subchapter S Corporations are a special type of corporation; the difference is how they are taxed, not how they relate to their vendors or customers.  As a result, they are named the same way as any other corporation. The rules on names of corporations vary by state.  ""Corporation"" and ""Incorporated"" (and their abbreviations) are allowed by every state, but some states allow other names as well.  The Wikipedia article ""Types of business entity"" lists an overview of corporation naming rules for each state. The S-Corp that I work for has ""Inc."" at the end of its name."
&gt;Corporate taxes as a percentage of federal revenue declined from 27.3 percent in 1955 to 8.9 percent in 2010  If the federal government adds a European-style VAT tax, that would also greatly decrease corporate taxes as a percentage of federal revenue, but it would be because there's more taxes coming in from other sources.   Federal income taxes in the United States didn't even *exist* until 1913.  Percentage of federal income goes down as income from other sources go up.  The United States [currently has the highest corporate tax rate in the developed world](http://www.huffingtonpost.com/2012/03/30/us-corporate-tax-rate_n_1392310.html).
Forget income tax, they need to raise the tax on capital gains and other investment income, that's where most of the wealth is. For example a CEO would get like 200k in income every year, but would get hundreds of millions in stock options. A higher income tax means nothing for this CEO, and for the country for that matter.
"This article on the landlord website Property118.com shows a simple example, demonstrating that a private landlord with a mortgage could see a huge jump in their effective tax rate (in this case, from 18% to 67% by 2020), while a corporate landlord will see no change at all. There's also a link in that article to a detailed report which is highly critical of the tax changes. The government obviously take a different view! (See here for more worked examples of how the tax changes will be applied). More information can be found on this on various landlord sites. A key phrase to look for is ""section 24"", referring to the section of the Finance (No. 2) Act 2015 which implements the change. Note that this change only applies to private landlords (i.e. those who own a property personally, rather than through a company), and who have a mortgage on the property, and who (after the new calculations) are higher or additional rate taxpayers."
An LLC or an S corp will result in the same tax obligations because both are pass-through tax entities. An LLC is more flexible for the situation you describe because the member and manager responsibilities can be detailed in the operating agreement. You really should get a business attorney to help you get your operating agreement in order. There's also a startups beta site on Stack Exchange that may be able to help you with questions about ways to handle your operating agreement.
An LLC is a pass-through entity in the USA, so profits and losses flow through to the individual's taxes.  Thus an LLC has a separate TIN but the pass-through property greatly simplifies tax filings, as compared to the complicated filings required by C-corps.
For a business, it has absolutely nothing to do with what's in the bank. A business could be billions of dollars in the hole cash wise and still be required to pay taxes, and it can also be flush with billions of dollars in cash and get a refund.  It's all from differences between tax accounting and accrual ( standard business) accounting.