Corporations are entities wherein the “owners” acquire stock in the corporation as their entitlement of ownership. There are two types of corporations, one is a C Corporation and the other is an S Corporation. The C Corporation stands alone in the payment of tax, while the S Corporation passes along the profits directly to its shareholders and usually does not pay income tax on its own. Shareholders who materially participate in the corporation must receive “reasonable compensation” for services – in other words, wages.
There is one other type of corporation, called a nonstock corporation. This entity is the corporation we refer to as a nonprofit organization. Such a corporation usually applies for tax exempt treatment wherein the corporation does not pay income tax on its activities directly related to its function. Some of these tax exempt organizations apply for the status as a nonprofit charitable organization. Marlene Dunn Till, owner of Dunn Accounting, has worked with many nonprofit corporations in achieving tax exempt status. She has taught seminars to individuals involved in these organizations and assisted them in their organization, application and tax returns for over 20 years. She was given statewide recognition from the Association of Wisconsin Snowmobile Clubs for imparting her knowledge and assistance to over 600 snowmobile clubs in Wisconsin.
With the knowledge that comes from experience, education and implementation, Dunn Accounting & Tax Preparation can assist your corporation with a variety of services including accounting, financials and tax return completion. We are only a phone call or email away.