Corporate Tax In The United States
Corporate 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. Federal tax rates on corporate taxable income vary from 15% to 35%. State and local taxes and rules vary by jurisdiction, though many are based on federal concepts and definitions. Taxable income may differ from book income both as to timing of income and tax deductions and as to what is taxable. Corporations are also subject to a federal Alternative Minimum Tax and alternative state taxes. Like individuals, corporations must file tax returns every year. They must make quarterly estimated tax payments. Controlled groups of corporations may file a consolidated return.
Some corporate transactions are not taxable. These include most formations and some types of mergers, acquisitions, and liquidations. Shareholders of a corporation are taxed on dividends distributed by the corporation. Corporations may be subject to foreign income taxes, and may be granted a foreign tax credit for such taxes.
Shareholders of most corporations are not taxed directly on corporate income, but must pay tax on dividends paid by the corporation. However, shareholders of S Corporations and mutual funds are taxed currently on corporate income, and do not pay tax on dividends.
The United States has the highest marginal corporate tax in any of the world's developed economies.
Read more about Corporate Tax In The United States: Overview, State and Local Income Taxes, History, Entity Classification, Taxable Income, Tax Credits, Tax Deferral, Interest Deduction Limitations, Other Corporate Events, Distribution of Earnings, Earnings and Profits, Liquidation, Foreign Corporation Branches, Consolidated Returns, Transfer Pricing, Alternative Taxes, Tax Returns, Further Reading
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