Corporate Tax in Bay Minette, Alabama
In Bay Minette, Alabama, a "corporation" is specified as a legal entity that's separate from its owners. Thus, from a legal standpoint, the owner of a corporation and the corporation itself are not the same "person."
This doctrine is identified as "corporate personhood." While the concept is somewhat abstract, the law of Alabama treats corporations as individual persons, for most purposes. This means that, legally, corporations have most of the same rights, privileges, and commitments as living, breathing human beings.
One of these commitments is the duty to pay income tax in much the same way as an individual person.
Corporate Tax Rate in Bay Minette, Alabama
Every corporation in the U.S. which has taxable income must pay its share of the federal corporate income tax. The majority of states additionally have a corporate income tax, which Bay Minette, Alabama corporations are required to pay.
At the federal level, and in certain states, corporations are taxed at different rates from individuals. Federally, the top corporate tax rate is 35% - a rate applying to corporations earning more than $18.3 million per year. Corporations earning less than $50,000 a year pay a 15% corporate tax rate, and there are a few tax brackets in between. For comparison, the federal income tax for persons maxes out at 33%.
The tax rate in Alabama for corporations probably also differs from the taxes that individuals must pay. In some states, the government has determined that their interests would be best served by making corporate taxes as low as possible. So in many states, the tax rate for corporations is much lower than the one paid by individuals, unlike the federal corporate tax.
Whatever their legal tax rate, all corporations in Bay Minette, Alabama are obligated to comply with state and federal income tax laws. Failure to pay income tax can be punished by massive fines, which can occasionally prove financially ruinous.
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How Can a Bay Minette, Alabama Corporate Tax Lawyer Help?
Many bigger companies have corporate attorneys and accountants on staff who help them adhere with federal and state tax laws.
As most business owners know, however, the majority of small Bay Minette corporations can't afford to have attorneys on staff full time. Thus, if you run a small corporation, and are confused about the corporate tax issues that may affect you, it's a very good idea to retain the services of a Bay Minette, Alabama tax attorney immediately.