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A Guide To C Corporation Tax Deductions

There's no denying that C Corp taxes are complex. If you're a business owner looking for ways to lower your corporation tax bill, you're in the right place. We'll break down corporation tax advantages, are sales taxes deductible and common tax deductions for C Corporations. Key takeaways:
  • C Corporation tax deductions include health insurance, employee salaries and bonuses, and charity donations.
  • You can also deduct charitable donations and everyday business expenses like rent and supplies.
  • Business losses can reduce future taxes, but new businesses with ongoing losses might attract IRS scrutiny.

Table of contents

A brief overview of C Corp taxes...Read more

A list of C Corp tax deductions...Read more

Are sales taxes deductible?...Read more

Can you deduct property tax?...Read more

Are personal property taxes deductible?...Read more

A brief overview of C Corp taxes

A C Corp is taxed as its own entity, which means it pays corporate income tax (21%) on its profits. Thankfully, there are C Corp tax deductions available that can help reduce how much tax you owe. In addition to federal taxes, you also need to think about state taxes, which can vary depending on where your business operates. Some states have their own corporate income tax, while others might have franchise or alternative minimum taxes. The good news is that the local state tax deduction allows you to deduct certain state and local taxes from your federal taxable income. C Corps also need to make quarterly estimated tax payments to the IRS throughout the year. These payments are based on your expected income, and missing them can lead to penalties. Another thing to keep in mind is "double taxation." Your C Corp pays taxes on its earnings, and then shareholders pay taxes on dividends.

A list of C Corp tax deductions

C Corporation tax deductions can be a valuable tool for reducing your tax bill, but knowing which deductions to take advantage of can make all the difference. As a C Corp, you have the option to write offs like the local state tax deduction and daily expenses that can help lower your taxable income, allowing you to reinvest more into your business. You’ll take these deductions on Form 1120.
Infographic entitled C Corp Deductions listing some write offs that are part of C Corp advantages.

1. Health insurance premiums

2. Employee salaries and bonuses

3. Charitable contributions

4. General business expenses

5. Business losses

Are sales taxes deductible?

Sales taxes can be a bit confusing when it comes to C Corps. Basically, you can’t deduct the sales taxes you collect from your customers. That’s because these taxes are not really your expense; they’re collected on behalf of the state. You can, however, deduct the sales taxes you pay on items you buy for your business. For example, if you run a retail store and buy $5,000 worth of new inventory and pay $400 in sales tax, you can deduct that $400 from your taxable income. This means you can lower your tax bill by the amount of sales tax you paid on your business purchases. So, while you don’t get a break on the sales tax you collect from customers, you do get a tax break on the sales tax you spend on things you need for your business. Just keep good records of these purchases and their sales taxes to make sure you get the deduction right. This way, you can save a bit on your taxes and keep your business running smoothly.

Can you deduct property tax?

C Corps can deduct property tax, which can be a helpful tax break for your business. If your C Corp owns property, such as office buildings, warehouses or even the land your business operates on, the property taxes you pay on these assets are deductible. This deduction is a C Corp advantage and can reduce your taxable income and help lower your overall tax bill. For example, let’s say your business owns a warehouse and you pay $10,000 in property taxes each year. You can deduct this $10,000 from your taxable income. This means that when you file your taxes, you’ll be able to subtract the amount you spent on property taxes from your total income, which lowers the amount of tax you owe. It's important to keep detailed records of your property tax payments and any related documents. This is so that you can accurately claim the deduction and avoid any issues with the IRS.

Are personal property taxes deductible?

C Corps can deduct personal property taxes, which can help reduce your tax bill. Personal property taxes are those you pay on items like office furniture, computers, or machinery used in your business. So if you own a small business and have a few computers, printers and other office equipment, you might pay a personal property tax on these items. If you’re paying $1,500 in taxes for these items, you can deduct that $1,500 from your taxable income. This means you’ll lower the amount of tax you owe. Again, good records are key to taking this deduction. FlyFin’s expert CPAs offer unlimited tax support on the app for business owners looking to maximize savings. AI finds all your deductions simply by scanning your expenses, making sure every business cost is saving you in taxes.

C Corp taxation

This guide covers the C Corporation taxation basics, including filing Form 1120, understanding non-deductible federal income taxes and the double taxation of dividends.

C Corp tax dividend rate

Learn how C Corp dividends are taxed twice and how tax rates vary for qualified versus ordinary dividends. Find out how S Corp dividends differ in tax treatment.

Filing C Corp taxes

Filing C Corp taxes means knowing filing deadlines, important tax forms, business deductions and paying on time. Form 1120 is the main C Corp tax form.

C Corp Tax Return Deadline: An All-Inclusive Guide for Independent Contractors

Find out when the C Corp tax return is due and how to stay out of trouble. Learn the advantages of cybersecurity safeguards for online tax filing and tax software for C Corp filings. Receive professional advice on meeting the deadlines for your C Corp tax return.

C Corp taxation

This guide covers the C Corporation taxation basics, including filing Form 1120, understanding non-deductible federal income taxes and the double taxation of dividends.

C Corp tax dividend rate

Learn how C Corp dividends are taxed twice and how tax rates vary for qualified versus ordinary dividends. Find out how S Corp dividends differ in tax treatment.

Filing C Corp taxes

Filing C Corp taxes means knowing filing deadlines, important tax forms, business deductions and paying on time. Form 1120 is the main C Corp tax form.

C Corp Tax Return Deadline: An All-Inclusive Guide for Independent Contractors

Find out when the C Corp tax return is due and how to stay out of trouble. Learn the advantages of cybersecurity safeguards for online tax filing and tax software for C Corp filings. Receive professional advice on meeting the deadlines for your C Corp tax return.

What’s FlyFin?

FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors. But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. to find every possible tax deduction. Then, the CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes. Download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and more money on your taxes than last year, guaranteed.
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