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What Are The Tax Rates For Corporations?
Tax Rate Schedule
Most corporations figure their tax by using the following tax rate schedule.
This section discusses an exception to that rule for qualified personal service
corporations. Other exceptions are discussed in the instructions for Schedule
J (Form 1120) or Part I (Form 1120-A).
If taxable income (line 30, Form 1120, or line 26, Form
1120-A) is:
|
| Over-- |
But not over-- |
|
Tax is: |
|
Of the
amount over-- |
| $0 |
50,000 |
|
15% |
|
-0- |
| $50,000 |
75,000 |
|
$ 7,500 + 25% |
|
$50,000 |
| 75,000 |
100,000 |
|
13,750 + 34% |
|
75,000 |
| 100,000 |
335,000 |
|
22,250 + 39% |
|
100,000 |
| 335,000 |
10,000,000 |
|
113,900 + 34% |
|
335,000 |
| 10,000,000 |
15,000,000 |
|
3,400,000 + 35% |
|
10,000,000 |
| 15,000,000 |
18,333,333 |
|
5,150,000 + 38% |
|
15,000,000 |
| 18,333,333 |
-- |
|
35% |
|
-0- |
Qualified personal service corporation. A qualified personal service
corporation is taxed at a flat rate of 35% on taxable income. A corporation
is a qualified personal service corporation if it meets both of
the following tests.
- Substantially all the corporation's activities involve the performance of
personal services and,
- At least 95% of the corporation's stock, by value, is owned, directly or
indirectly, by any of the following:
- Employees performing the personal services.
- Retired employees who had performed the personal services.
- An estate of the employee or retiree described above.
- Any person who acquired the stock of the corporation as a result of
the death of an employee or retiree (but only for the 2-year period beginning
on the date of the employee's or retiree's death).
See section 1.448-1T(e) of the regulations for details.
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