Per Diem Rates from the U.S. General Services Administration
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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
C corporation vs S corporation
A corporation is a separate legal entity, separate and apart from its owners (called shareholders or stockholders). The C and S are sections of Internal Revenue Code (Title 26 of the U.S Code) governing federal tax treatment.
A C corporation is created under state law; an S corporation is not created under state law, it is created by filing Form 2553, Election by a Small Business Corporation with the IRS to be treated under the rules of IRC subchapter S.
While a C corporation or LLC may elect to be treated an S corporation for federal tax purposes, making this election does not change the legal status of these entities. A C corporation remains subject to the corporation laws of the state of incorporation and an LLC remains subject to the LLC laws of the state of formation.
A C corporation is not a pass-through entity; it reports income and loss on Form 1120, U.S. Corporation Income Tax Return and is subject to taxes at the entity level. A C corporation does not pass losses through the entity to its shareholders.
An S corporation reports income and loss on Form 1120-S, U.S. Income Tax Return for an S Corporation. Items of income, deductions, gains, losses and credits flow through the entity to its shareholders; it does not pay taxes at the entity level (with some exceptions).
S corporation shareholders receive Schedule K-1 annually which reports their share of the entity's income, deductions, gains, losses and credits. Shareholders use K-1 as the basis for reporting their share of these items on their personal tax returns.
C corporations distribute profits to shareholders, called dividends. Undistributed C corporation profits remain in the corporation in an equity account called Retained Earnings.
Legal Attributes of a Corporation
The following legal attributes apply to a corporation:
- It is a separate legal entity, separate and apart from its owner(s). In a widely quoted definition, Chief Justice John Marshall in 1819 described a corporation as an artificial being, invisible, intangible, and existing only in the contemplation of the law.
- It provides shareholders limited liability from corporate debts. This is one of the most important reasons for incorporating.
- It is formed under state or federal law or the laws of other countries. A corporate charter is obtained from one of the fifty states.
- Shares of stock may be transferred freely provided there are no restrictions.
- It has continuity of life. If a shareholder dies or sells his shares, the corporation continues doing business as usual.
- It can buy, sell, and own property in its own name.
- It can enter into contracts with others.
- It can sue and be sued in its own name.
- It can be a partner in another business.
- Its name is signed by corporate seal.
Tax Identification Numbers For a Corporation
Employer Identification Number (EIN):
A corporation must have an EIN. The IRS issues it. The number is used to identify the corporation on tax documents.
State Withholding Number:
For state purposes, the corporation will need a state withholding number. Some states, such as Nevada, don't have a personal income tax. Check your state.
State Account Number:
This is for state unemployment tax (SUTA) reporting. Generally, states, such as Arizona, assign each employer an account number.