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Corporate Tax Formula:
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Small business corporate tax is calculated on the taxable income of incorporated businesses. The standard corporate tax rate in the US for 2025 is 21%, applied to profits after allowable deductions.
The calculator uses the corporate tax formula:
Where:
Explanation: The calculation determines taxable income by subtracting deductions from profit, then applies the corporate tax rate to calculate the tax liability.
Details: Accurate tax calculation is essential for small businesses to ensure compliance with tax laws, proper financial planning, and avoiding penalties for underpayment.
Tips: Enter profit in USD (total revenue minus cost of goods sold), deductions in USD (allowable business expenses), and tax rate as percentage. All values must be non-negative.
Q1: What are common business deductions?
A: Common deductions include employee salaries, rent, utilities, office supplies, business travel, equipment depreciation, and professional services.
Q2: Is the 21% rate applicable to all businesses?
A: The 21% is the standard federal corporate tax rate. Some states have additional corporate taxes, and certain industries may have different tax treatments.
Q3: When are corporate taxes due?
A: Corporate tax returns are typically due by the 15th day of the 4th month following the end of the tax year (April 15 for calendar year corporations).
Q4: What if my business operates at a loss?
A: If deductions exceed profit, taxable income is zero and no tax is due. Net operating losses can often be carried forward to future tax years.
Q5: Should I consult a tax professional?
A: Yes, this calculator provides estimates only. Always consult with a qualified tax professional for accurate tax planning and compliance.