Finding the tax rate for a corporation is not as easy as it is to figure a tax rate for an individual. This is because as an individual need only determine his taxable income, most corporations need to use several tax rates to determine their tax liabilities. Unfortunately for successful corporations, the better your client's business does and the more money it makes, the more the government demands from them in the way of taxes. Most corporations pay a tax based on a marginal rate that increases as the taxable income level increases.
In order to be able to figure your client's corporate tax rate, you must first have computed their taxable income. Their taxable income is the amount they have figured and entered on Form 1120, line 30 or Form 1120-A, line 26. After you have figured this amount, you can use the table below to figure out their corporate tax rate.
|Calculated Taxable Income||Tax Rate||For the Amount Over|
|$0 - $50,000||15%||$0|
|$75,000 - $100,0000||$13,750 + 34%||$75,000|
|$100,000 - $335,000||$22,250 + 39%||$100,000|
|$335,000 - $10,000,000||$113,900 + 34%||$335,000|
|$10,000,000 - $15,000,000||$3,4000,000 + 35%||$10,000,000|
|$15,000,000 - $18,330,000||$5,150,000 + 38%||$15,000,000|
The only way to get out making all of these multiple calculations is if your business can be categorized as a qualified personal service corporation. If this is the case, you are entitled to calculate your taxable income at a flat rate of 35 percent. In order to have your corporation qualify as a personal service corporation, it must meet to criteria: