Corporate Tax in Covina, California
In Covina, California, a "corporation" is defined as a legal entity that's separate from its owners. Therefore, from a legal standpoint, the owner of a corporation and the corporation itself are not the same "person."
This rule is called "corporate personhood." Basically, under the law of California, corporations are, in many ways, the same as individual human beings. Therefore, corporations have some of the same legal rights and obligations as actual people.
One of a corporation's primary legal obligations is its duty to pay income taxes, as an actual person would.
Corporate Tax Rate in Covina, California
Every corporation in the United States is required to pay federal income tax. Most states also have a corporate income tax, which corporations doing business in Covina, California are required to pay.
Under federal laws that control corporate income taxes, corporations pay a different income tax rate from individual people. Corporations pay a maximum federal income tax rate of 35%, and a minimum rate of 15%, depending on their income. The high tax rate applies to corporations that make $18.3 million per year, and the low rate applies to any company bringing in less than $50,000.
In California the corporate tax rate probably differs from the individual tax rate as well. In many states, policymakers have determined that the local economy benefits most when it is business-friendly. In those states, the corporate tax rate is usually lower than the individual income tax rate, unlike the federal system, where the corporate tax rate is higher.
In any case, Covina, California corporations have to pay both the state and federal income tax. If they fail to do so, they can be subject to severe penalties, such as very large fines. These fines can be big enough to put some smaller companies out of business. Suffice to say, it's normally cheaper for corporations to pay their taxes than to not.
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How Can a Covina, California Corporate Tax Lawyer Help?
Many major corporations employ tax lawyers full time, to ensure that they are in compliance with tax laws, and find legal means to reduce their tax liability.
But if you are the owner of a small corporation in Covina, chances are you don't have a full-service legal department on your payroll. Therefore, if you need help with your corporate taxes, it's important that you speak with a lawyer in Covina, California who practices tax law.