What is the difference bewteen an S corp. and an C corp.?/// What would be a normal cost to be Incorporated?

Answer 1

An S Corp passes all its income through to the shareholders, either as wages or as a distribution. So the shareholders get taxed each year on the total income. A C Corp stands alone and pays tax on its profits. The shareholders only pay tax on monies actually paid out during the year.

Costs of incorporation vary by state. A large consideration is the annual filing fee and franchise tax (or similar) to the state the corporation is registered in.

Answer 2

Both prior answers are pretty good. The C corp earnings are taxed at the corporate level and then distributions are taxed again to shareholders. The S Corporation tax is at the shareholder level. Your second part of the question dealt with cost to incorporate. If you state has an LLC statute then the cost is quite easy and the IRS has check the box regulations that make it quite easy to elect to be treated as either a C corporation or an S corporation. You can get publications on the subject for free by calling 1-800-tax-form

Answer 3

The difference between a S-corp and C-corp is how the companies are taxed. A C-Corp will have double taxation while an S-corp is a pass through entity meaning that any income earned in an S-corp will be passed through proportionately to its stockholders.
Also, there are limitations to who can own an S-corp. The basic difference is that C-corps can have virtually anyone be owners including other Corporations while and S-Corp is basically limited to natural owners and non-profits.