Dividend Distribution – DougFreemanCPA.com

Estimated tax payments: Who owes them and when is the next one due?

Capital Gains, Dividend Distribution, Estimated Tax Payments, Federal Taxes, Income Tax, Small Business / By Douglas Freeman

If you don’t have enough federal tax withheld from your paychecks and other payments, you may have to make estimated tax payments. This is the case if you receive interest, dividends, self-employment income, capital gains or other income. Here are the applicable rules for paying estimated tax without triggering the penalty for underpayment. When are …

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Is your corporation eligible for the dividends-received deduction?

C Corporation, Corporations, Dividend Distribution, Small Business, Stocks, Tax Deduction / By Douglas Freeman

There’s a valuable tax deduction available to a C corporation when it receives dividends. The “dividends-received deduction” is designed to reduce or eliminate an extra level of tax on dividends received by a corporation. As a result, a corporation will typically be taxed at a lower rate on dividends than on capital gains. Ordinarily, the …

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Making withdrawals from your closely held corporation that aren’t taxed as dividends

Business Loans, Closely Held Corporations, Compensation, Corporations, Debt-to-equity Ratio, Dividend Distribution / By Douglas Freeman

Do you want to withdraw cash from your closely held corporation at a minimum tax cost? The simplest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax-efficient since it’s taxable to you to the extent of your corporation’s “earnings and profits.” It’s also not deductible by the corporation. Five alternatives. …

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