The money the grocery store makes is Hot Santa Post Malone Rockstar Ugly Christmas Sweater Shirt, not my money until I either pay it to myself in the form of a salary (and pay income tax) or sell the store (or pieces of the store in the form of shares, like Apple stock). So even though the company makes money and is taxed, that’s not my money and they’re not my taxes. Does this difference have anything to do with other differences between C and S corps? This isn’t necessarily true. It all depends on how the business’s taxes are setup. I have that is taxed as an S corp. For an, the business doesn’t pay taxes on profits at all. The business only pays medicine and unemployment taxes based on wages paid to employees.
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At the end of the year, profits are Hot Santa Post Malone Rockstar Ugly Christmas Sweater Shirts calculated, and the profits or losses are then passed on to the owner/owners via a K-1 that they have to report and pay income taxes on their 1040 (personal return). The owners can keep that money in their business, but it is technically their money that they can take out of the business at any time as a distribution without paying any additional taxes on it since it’s already been accounted for. Now C Corps do pay taxes on profits and then the owners have to pay additional taxes. As far as I understand though.
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