 |
New Hampshire Corporation
|
- Shareholders have limited liability for the corporation's debts or judgments against the corporations.
- Generally, shareholders can only be held accountable for their investment in stock of the company. (Note however, that officers can be held personally liable for their actions, such as the failure to withhold and pay employment taxes.)
- Corporations can raise additional funds through the sale of stock.
- A corporation may deduct the cost of benefits it provides to officers and employees.
- Can elect S Corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership.
- A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $75,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34% tax on income over $335,000.
- A sole proprietor who filed a federal income tax return under the status of married, filing jointly, would pay 15% federal income tax on taxable income up to $35,800; 28% tax on income from $35,801 to 86,500; and 31% tax on income over $86,501.
Disadvantages of a Corporation
- The process of incorporation requires more time and money than other forms of organization.
- Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations.
- Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible form business income, thus this income can be taxed twice.
Federal Tax Forms for Regular or "C" Corporations
- Form 1120 or 1120-A: Corporation Income Tax Return
- Form 1120-W Estimated Tax for Corporation
- Form 8109-B Deposit Coupon
- Form 4625 Depreciation
New Hampshire’s Business Tax Climate Ranks 5th
New Hampshire ranks 5th in the State Business Tax Climate Index, which measures the impact on business of five major elements of the tax system: the percentage of income taken by all taxes, the individual income tax rates, the corporate income taxes, the sales tax rate, and the complexity of the tax system. Neighboring states ranked as follows: Vermont (45th), Maine (33rd) and Massachusetts (33rd).
New Hampshire’s State/Local Tax Burden Second Lowest in the Nation
In the early nineties, New Hampshire had a steadily rising tax burden that peaked in 1992 at 10.3%. From 1993 until the present, the state has seen individual incomes rise significantly faster than state/local tax collections. Estimated in 2004 at 7.5% of income, New Hampshire’s state/local tax burden percentage is the second lowest in that nation, higher than only Alaska.
New Hampshire Individual Income Tax System Among Nation's Simplest, Least Expensive
New Hampshire’s personal income tax system is one of the nation’s most simple and inexpensive systems. With no separate tax brackets, New Hampshire income tax only applies to dividend and interest income (not ordinary income). As a result many citizens have little or no income tax liability. New Hampshire’s flat rate of 5.0% is 6th lowest among states levying personal income taxes. New Hampshire' 2002 individual income tax collections were $56 per person (42nd highest nationally).
New Hampshire’s Corporate Income Tax Collections Per Capita, Second Highest Nationally
New Hampshire’s corporate tax structure consists of simply a flat tax of 8.5% on all corporate income. This tax ranks the state 13th highest among states levying corporate income taxes. In 2001, corporate tax collections reached $278 per capita.
Home | Site-Map