Common Corporation Tax Deductions

Unlike LLCs and S corporations, a corporation (also referred to as a C corporation) qualifies for double taxation, since a corporation is taxed at the corporate (business profits) and individual (income) level. To lower a corporation's taxable profits, a corporation can deduct a number of business expenses.

Deductions

Generally, the tax deductions associated with a sole-proprietor and S corporation are also corporation tax deductions. These include travel, cars, planes, education, meals, costs of goods and other necessary expenses.

Start Up Costs

A corporation can deduct a limited amount of start up costs, or those costs related to starting the business or trade.

Dividends

A corporation can deduct qualifying dividends, including up to 80 percent of dividends received from domestic corporations.

Charitable Contributions

A corporation can deduct charitable contributions, as long as they do not exceed 10 percent of the corporation's taxable income and they were made to a qualifying charity.

Capitol Losses

A corporation can deduct capitol losses up to the amount of its gains. If the losses are greater than the gains, a corporation can carry over the capitol losses and potentially deduct them the following year.

Considerations

As always, consult with an accountant first to maximize your deductions.

Resources

• IRS Publication 535
• IRS Publication 542