Taxable Income
$200,000
Federal Tax (21%)
$42,000
Net Income
$158,000
What is the corporate tax rate in 2025?
The federal corporate income tax rate is a flat 21%, established by the Tax Cuts and Jobs Act (TCJA) of 2017. This replaced the previous graduated rate structure that ranged from 15% to 35%. The 21% rate applies to all C-corporations regardless of income level. State corporate taxes may also apply, varying by state.
Is there a graduated corporate tax rate?
No. Since 2018, the US has a flat 21% federal corporate income tax rate for all C-corporations. The previous graduated system with rates from 15-35% was eliminated by the TCJA. However, some states still have graduated corporate tax rates that apply in addition to the federal rate.
What is the difference between C-Corp and S-Corp taxation?
C-Corporations pay corporate income tax at the entity level (21%) and shareholders pay personal tax on dividends -- this is known as "double taxation." S-Corporations are pass-through entities where income flows through to shareholders' personal tax returns, avoiding entity-level tax. S-Corps have restrictions including a 100-shareholder limit and must be domestic corporations.
Can I deduct business expenses from corporate income?
Yes. Corporations can deduct ordinary and necessary business expenses from their gross revenue before calculating taxable income. Common deductions include employee wages and benefits, rent, utilities, office supplies, depreciation, interest on business loans, advertising, and professional services. The deduction reduces your taxable income, lowering your overall tax liability.
IRS-Aligned: This calculator uses the flat 21% federal corporate rate established by the TCJA. State corporate taxes may apply in addition. Consult a CPA for complete tax planning.
Disclaimer: This calculator provides estimates based on current IRS rates and thresholds for the 2025 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your filing status, state of residence, deductions, and individual circumstances. Always consult a qualified tax professional or CPA before making financial decisions. Read our terms
This calculator uses official rates and thresholds from:
Last verified: March 2026 · Tax year 2025. Results are indicative — consult a qualified accountant for personalised advice.