C Corporation tax laws
Please advise further on whether a C Corp is the better option for us rather than LLC given the issues we are trying to overcome of setting up a US company and paying tax in the UK rather than US.
- What is the difference between a C Corp and an S Corp?
- We want to have limited liability and protection and to pay tax in the UK on salaries for both of us (non US and US non-resident).
‘You could be an employee or a shareholder or both. The UK person would not be taxed in the US even as an employee of the US C Corp as long as they have no presence in the US.’
3 Please explain what you mean by ‘no presence’. We would physically be in the UK but trading in the US, using a US PO box address and for some products, using US dropshippers delivering products to US customers. Does this affect anything from the perspective of having a C Corp and being taxed outside of the US? ( I know there are other tax issues from this such as sales tax).
4. ‘Dividends paid to a non US person from a US corp is taxable but the treaty allows a lower rate.’
Are dividends treated differently to salary?
5‘You need to know that a C corp first pays tax on all profits. When those are passed to shareholders those shareholders are taxed again. There is a double taxation in a C corp situation.’
Could profits be reduced by taking larger salaries which would be an expense?
6.Ultimately, we need to find out if the C Corp is the better option for what we want?
7.Please also advise what additional filing requirements there are for a C Corp.