C Corp vs. S Corp: Which Is Right for Your Business?

See how these two corporations differ on taxes, ownership, and paperwork, then file your Form 1120 or 1120-S with TaxAct Business.

Start filing

Quick answer

Both a C corp and an S corp start as a corporation formed with your state. The difference is federal taxation. A C corp pays corporate income tax on its profit (Form 1120), and shareholders pay tax again on dividends, which is known as double taxation. An S corp elects pass-through taxation (Form 1120-S), so profit is generally taxed once on the shareholders' personal returns.

C corp vs. S corp at a glance

Feature	C Corp	S Corp
Tax form	Form 1120	Form 1120-S
Taxation	Corporate tax, then tax on dividends (double taxation).	Pass-through, generally taxed once on owners' returns.
Ownership	Unlimited shareholders, any type.	Up to 100 shareholders, US individuals only.
Stock classes	Multiple classes allowed.	One class of stock only.
Best for	Companies reinvesting profit or seeking outside investors.	Smaller US-owned businesses wanting pass-through savings.

Feature

C Corp

S Corp

Tax form

Form 1120

Form 1120-S

Taxation

Corporate tax, then tax on dividends (double taxation).

Pass-through, generally taxed once on owners' returns.

Ownership

Unlimited shareholders, any type.

Up to 100 shareholders, US individuals only.

Stock classes

Multiple classes allowed.

One class of stock only.

Best for

Companies reinvesting profit or seeking outside investors.

Smaller US-owned businesses wanting pass-through savings.

File your 1120 or 1120-S with confidence

Whichever structure you choose, TaxAct Business guides you through your corporate return step by step, with a 100% Accuracy Guarantee.

Start your corporate return

Frequently asked questions

More resources on C corps and S corps

Explore entity comparisons, filing guides, and tax strategies for corporations.

S Corp vs. LLC

Compare S corps and LLCs side by side on taxes, liability, and paperwork. Comparison tables show which structure fits your business, and FAQs cover payroll taxes and when to elect S corp tax status.

How to File S Corp Taxes

A step-by-step TaxAct Blog guide to filing Form 1120-S, from gathering records to issuing K-1s. Sections walk you through each part of the return and deadline, ideal for a first-time S corp filer.

Business Tax Deadlines 2026

2026 filing and extension dates by business entity in one easy-to-scan table. See when 1120-S, 1065, and Schedule C returns are due, how Form 7004 works, and FAQs on penalties for missed deadlines.

What Is a Schedule K-1?

A TaxAct Blog explainer on Schedule K-1 for partners, S corp shareholders, and trust beneficiaries. Learn what each box means, when to expect your K-1, and how to report it on your personal return.

What Is QBI and How Does It Work?

A TaxAct Blog explainer on the qualified business income deduction, worth up to 20% of pass-through income. Learn who qualifies, how income limits apply, and how to claim it on your federal return.

Over 650,000 Business Tax Returns: Based on E-filed returns completed through TaxAct Business software (Forms 1065 and 1120S) since 2003.

100% Accuracy Guarantee: If you are assessed a penalty from the IRS or state taxing authority due to a calculation error in a TaxAct product, we'll pay the penalty and interest. This guarantee does not apply if you use a TaxAct product to prepare returns for others. This guarantee does not apply if you override amounts within your tax return or if you fail to enter all required information accurately. Details at 100% Accuracy Guarantee.

Money-Back Guarantee: If you’re not completely satisfied with your TaxAct software purchase, you can request a full refund within 30 days of receipt to get your money back. No questions asked! The Money-Back Guarantee does not apply after you use the TaxAct software to print or e-file a return and that return is accepted by the IRS or state taxing agency. Read more about our Money-Back-Guarantee.

Start For Free: For online business products, you can start free and pay when you file. This means you will not be charged if you decide to stop using any product prior to printing or e-filing your return.

Xpert Assist Suite of Offerings: Tax Experts are available with TaxAct® Xpert Assist®, which encompasses a suite of services designed to provide varying levels of support and assistance for your tax filing needs. These services are available at an additional cost and are subject to limitations and restrictions. Service availability, features, and pricing may vary and are subject to change without notice. For more details, visitTaxAct Xpert Assist Terms.

Real People. Real Reviews.: All reviews are from verified TaxAct customers. Reviews are managed by Bazaarvoice and comply with the Bazaarvoice Authenticity Policy. Cumulative star rating is for all TaxAct products.

Edition Pricing: Actual prices are determined at the time of payment, print, or e-file and are subject to change without notice. Add sales tax for applicable orders. Offers may end at any time and promotional offers may not be combined.

Refund Transfer: Refund Transfers are fee-based products offered by Republic Bank & Trust Company, Member FDIC. A Refund Transfer Fee and all other authorized amounts will be deducted from the taxpayer’s tax refund.

Audit Defense: See Audit Defense provided by Tax Protection Plus (PDF) for further details of services and requirements. May not apply to certain forms and credits. Certain customers may not qualify for services based on past tax audit history, residency, or other factors. Audit Defense is not insurance. Audit Defense is subject to terms and conditions (PDF) located on Tax Protection Plus' website.

Partners: TaxAct gets fees from some third parties that provide offers to its customers. This compensation may affect what and how we communicate their services to you. TaxAct is not a party to any transactions you may choose to enter into with these third parties.

Trademarks: All trademarks not owned by TaxAct, Inc. that appear on this website are the property of their respective owners, who are not affiliated with, connected to, or sponsored by or of TaxAct, Inc. TurboTax is a registered trademark of Intuit, Inc. H&R Block is a registered trademark of HRB Innovations, Inc.