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A C corporation is a type of business where it is considered its own separate taxable entity. Unlike most other business types it does not have a traditional owner or owners. In this type of business, shares are sold and shareholders are the actual company owners. As payment for owning a part of the business, the corporations pay dividends to the shareholders.

There are many tax benefits to being registered as a C corporation. For example, C corporations are a separate taxable entity. This means that there are no owners who pay income tax and the original owners have no liability for taxes. The corporation is still responsible for paying taxes on taxable income that they generate and must file a Form 1120 every year to report income.
C corporations are taxed based on their income level. They are often taxed in lower tax brackets than individuals. Taxation is based on an income chart in tax brackets from 15% to 39% depending on the level of income generated.
Often corporations are able to reduce or completely eliminate their amount of taxable income by withdrawing salaries, which the corporation can deduct on their tax return. Corporations are not required to pay income tax on salaries paid, however the recipients are required to pay personal income tax on salaries received. In some instances, corporations are able to offset their entire net profit by paying out salaries, making it so no corporate income tax would be due.
In addition to paying taxes and salaries, corporations often pay dividends to their stockholders. These profits are taxed only and when they are released as dividends. However, corporations may withhold dividends if they can consider the accumulated income to be related to "reasonable needs of the business." If it is found that the reserved income is not meeting that requirement then an accumulated earnings tax of 39.6% will be applied in addition to the regular corporate tax. Any corporation can accumulate up to $250,000 in earnings and not receive the penalty tax.
Another tax aspect to being a C corporation is that if it is determined that a corporation has received "too many" tax preference items they may be subject to a Corporate Alternative Minimum Tax (AMT). If they are subject to an AMT the rate is 20%. However,"As of 1998, the corporate AMT will not apply to any corporation that had an average gross receipts of less than $5 million for a 3 year period after 1994, and this exemption continues until the corporation's average gross receipts exceed $7.5 million.
Another benefit is for the owners and a C corporation is that if a C corporation suffers a loss, the loss is carried by the company and not the owners. Also, if the corporation suffers a loss it can be used to offset future taxable income. A C corporation can carry the loss back to previous years when they had taxable income and had paid tax. In cases like this, the corporation can actually get a refund of tax money previously paid.
In conclusion there are many tax benefits to being registered as a C corporation.
Such as; the owners have very limited liability, they are taxed at lower increments, they can write off salaries paid making it so they have little or no taxable income, and that losses can be written off and can be used to obtain a tax refund.

Information collected from :
http://exinearticles.com/?Tax -Benefits-of-A-C-Corporations- Funding&id=64580
http://taxguid e.completetax.com/text/Q10_202 6.asp
http://biztaxlaw.about.co m/ad/ownershipstructures/a/cor ptaxrates.htm
http://biztaxlaw. about.com/od/corporations/a/cc orptaxation.htm

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