Corporate Tax Calculator — Federal & State Business Tax 2024

The federal corporate income tax rate is a flat 21% on all taxable income, set by the Tax Cuts and Jobs Act of 2017. This replaced the prior graduated rate structure (15%–35%). The 21% flat rate applies to all C-corporations regardless of income level. Additionally, there is a 15% Corporate Alternative Minimum Tax (CAMT) on adjusted financial statement income for large corporations with book income over $1 billion.

C-corporations face double taxation: the corporation pays 21% federal tax on its income, and when profits are distributed to shareholders as dividends, shareholders pay qualified dividend tax rates (0%, 15%, or 20%). This means the same income can be taxed at an effective combined rate of 30–40%+. S-corps and LLCs avoid this because profits flow through directly to owners' personal returns.

C-corps are best for companies seeking venture capital or planning an IPO (investors prefer corporate structure), companies with high earnings they want to retain at the 21% rate, or businesses with many shareholders. S-corps suit profitable small businesses where owners take a reasonable salary plus distributions taxed favorably. LLCs offer maximum flexibility and are ideal for small businesses, real estate, and partnerships. Always consult a CPA and attorney.

Generally, no. S-corporations are pass-through entities — the corporation itself does not pay federal income tax (some states impose a minimal franchise tax or S-corp tax). Instead, profits and losses flow through to shareholders who report them on their personal returns. S-corps avoid double taxation but have restrictions: max 100 shareholders, US citizens only, one class of stock, and no corporate shareholders.