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Tax Law (Questions About Taxes)/single member llc taxed as c-corp

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Question
I am a single member llc and last year was my first year in business. I have elected to be taxed as a c corp and my profits were about 40,000. Is there any additional taxes I need to pay after my profits are taxed at the corporate tax rate..(SE taxes)? Thanks

Answer
If you take the remainder as a dividend, you will pay tax on the dividend at your personal level. Tax on $40K is $6K, so the remaining $34K is either paid to you as a dividend or stays in the company for reinvestment.

If you leave the cash in the corporation, it is not subject to any other income tax.

Remember that unlike an S-Corporation, there are no tax-free distributions from the corporation to you personally.

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Randall Klein, MBA, EA

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I am an expert in personal and small business taxation, including Forms 1040, 1120, 1120S, 1065. I can answer any type of tax question except those that are requesting help in illegal tax evasion. Tax avoidance is legal, however. I do not do offshore trusts, or opt-out of the tax system type of queries.

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25 years real experience in dealing with tax preparation, representation before the IRS, tax problem resolution, and more. Successfully represented clients in Offers in Compromise with more than 95% of all offers accepted.

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