What Does Corporation Double Taxation Means?

Double taxation, most of the time, occurs in situations whereby a firm realizes some profit payable to shareholders as dividends. For the company, it first pays the taxes of its annual profits. Thus, after paying the dividends to shareholders, the company pays a second tax on its profits with the help of shareholders.

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Table of Contents

1. What does Corporation Double Taxation mean?

2. Which Types of Business Entities Encounter Double Taxation?

3. 2024 Tax Brackets (Taxes Due in April 2025)

What does Corporation Double Taxation mean?

Corporation double taxation is the process of being subjected to income taxes on the same earnings twice. This situation can arise in three specific situations, as outlined below:

Corporation double taxation for both the company and its shareholders.
In the context of international investments or trade.
In the case of loans, such as a 401k loan.

The most frequent occurrence of double taxation is when a company generates profits in the form of dividends. This is known as corporation double taxation. With corporation double taxation, initially, the company is taxed on its annual profits. Subsequently, once the company distributes dividends to its shareholders, they are required to pay a second round of taxes. Hence: corporation double taxation. Learn more about the difference between C Corp vs S Corp. Please contact our attorney to start a corporation.

Which Types of Business Entities Encounter Double Taxation?

The sole business entity subject to double taxation is the C-Corporation, commonly referred to as C-Corps. Other types of business entities follow different tax procedures that do not involve an additional tax payment. This is why you will only hear about IRS corporation double taxation.

2023 Tax Brackets

The 2023 tax year—meaning the return you’ll file in 2024—will have the same seven federal income tax brackets as the last few seasons: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income, including wages, will determine the bracket you’re in.

2023 Tax Brackets: Single Filer

If taxable income is:	The tax due is:
Not over $11,000	10% of taxable income
Over $11,000 but not over $44,725	$1,100 plus 12% of the excess over $11,000
Over $44,725 but not over $95,375	$5,147 plus 22% of the excess over $44,725
Over $95,375 but not over $182,100	$16,290 plus 24% of the excess over $95,375
Over $182,100 but not over $231,250	$37,104 plus 32% of the excess over $182,100
Over $231,250 but not over $578,125	$52,832 plus 35% of the excess over $231,250
Over $578,125	$174,238.25 plus 37% of the excess over $578,125

2023 Tax Brackets: Married Filing Separately

If taxable income is:	The tax due is:
Not over $11,000	10% of taxable income
Over $11,000 but not over $44,725	$1,100 plus 12% of the excess over $11,000
Over $44,725 but not over $95,375	$5,147 plus 22% of the excess over $44,725
Over $95,375 but not over $182,100	$16,290 plus 24% of the excess over $95,375
Over $182,100 but not over $231,250	$37,104 plus 32% of the excess over $182,100
Over $231,250 but not over $346,875	$52,832 plus 35% of the excess over $231,250
Over $346,875	$93,300.75 plus 37% of the excess over $346,875

2023 Tax Brackets: Head of Household

If taxable income is:	The tax due is:
Not over $15,700	10% of taxable income
Over $15,700 but not over $59,850	$1,570 plus 12% of the excess over $15,700
Over $59,850 but not over $95,350	$6,868 plus 22% of the excess over $59,850
Over $95,350 but not over $182,100	$14,678 plus 24% of the excess over $95,350
Over $182,100 but not over $231,250	$35,498 plus 32% of the excess over $182,100
Over $231,250 but not over $578,100	$51,226 plus 35% of the excess over $231,250
Over $578,100	$172,623.50 plus 37% of the excess over $578,100

2023 Tax Brackets: Married Filing Jointly

If taxable income is:	The tax due is:
Not over $22,000	10% of taxable income
Over $22,000 but not over $89,450	$2,200 plus 12% of the excess over $22,000
Over $89,450 but not over $190,750	$10,294 plus 22% of the excess over $89,450
Over $190,750 but not over $364,200	$32,580 plus 24% of the excess over $190,750
Over $364,200 but not over $462,500	$74,208 plus 32% of the excess over $364,200
Over $462,500 but not over $693,750	$105,664 plus 35% of the excess over $462,500
Over $693,750	$186,601.50 plus 37% of the excess over $693,750

2024 Tax Brackets (Taxes Due in April 2025)

The 2024 tax year, and the return due in 2025, will continue with these seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income, including wages, will dictate the bracket you’re in.

2024 Tax Brackets: Single Filer

If taxable income is:	The tax due is:
Not over $11,600	10% of taxable income
Over $11,600 but not over $47,150	$1,160 plus 12% of the excess over $11,600
Over $47,150 but not over $100,525	$5,426 plus 22% of the excess over $47,150
Over $100,525 but not over $191,950	$17,168.50 plus 24% of the excess over $100,525
Over $191,950 but not over $243,725	$39,110.50 plus 32% of the excess over $191,150
Over $243,725 but not over $609,350	$55,678.50 plus 35% of the excess over $243,725
Over $609,350	$183,647.25 plus 37% of the excess over $609,350

2024 Tax Brackets: Married Filing Separately

If taxable income is:	The tax due is:
Not over $11,600	10% of taxable income
Over $11,600 but not over $47,150	$1,160 plus 12% of the excess over $11,600
Over $47,150 but not over $100,525	$5,426 plus 22% of the excess over $47,150
Over $100,525 but not over $191,950	$17,168.50 plus 24% of the excess over $100,525
Over $191,950 but not over $243,725	$39,110.50 plus 32% of the excess over $191,150
Over $243,725 but not over $365,600	$55,678.50 plus 35% of the excess over $243,725
Over $365,600	$98,334.75 plus 37% of the excess over $365,600

2024 Tax Brackets: Head of Household

If taxable income is:	The tax due is:
Not over $16,550	10% of taxable income
Over $16,550 but not over $63,100	$1,655 plus 12% of the excess over $16,550
Over $63,100 but not over $100,500	$7,241 plus 22% of the excess over $63,100
Over $100,500 but not over $191,950	$15,469 plus 24% of the excess over $100,500
Over $191,950 but not over $243,700	$37,417 plus 32% of the excess over $191,150
Over $243,700 but not over $609,350	$53,977 plus 35% of the excess over $243,700
Over $609,350	$181,954.50 plus 37% of the excess over $609,350

2024 Tax Brackets: Married Filing Jointly

If taxable income is:	The tax due is:
Not over $23,200	10% of taxable income
Over $23,200 but not over $94,300	$2,320 plus 12% of the excess over $23,200
Over $94,300 but not over $201,050	$10,852 plus 22% of the excess over $94,300
Over $201,050 but not over $383,900	$34,337 plus 24% of the excess over $201,050
Over $383,900 but not over $487,450	$78,221 plus 32% of the excess over $383,900
Over $487,450 but not over $731,200	$111,357 plus 35% of the excess over $487,450
Over $731,200	$196,669.50 plus 37% of the excess over $731,200

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