What is a C Corporation?

In a C corporation, the company’s earnings are taxed at the corporate tax rate rather than at the business owner’s individual rate. Profits are often retained within the corporation, and the business’s total income is taxed at the C corporation rate of 21%. When the business owner decides to take out profits from the company (usually in the form of dividends), they will be taxed on those dividends and the income taxes on the earnings at the C corporation level, often referred to as double taxation.