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Yeah, Alex, I'm just saying: S-Corps don't pay federal corporate taxes, do they? I thought that was the point of an S-Corp. Your comment, before you edited it, said flat-out that they did.

(We file as S, but thankfully I'm not the person here that has to know exactly how this stuff works. See previous comments for evidence that you should not take tax advice from me.)

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Right, yeah, looks like S-Corps don't pay federal corporate taxes. I knew it was to avoid double taxation but I had forgotten which taxation S-Corps were exempt from. My bad. Unfortunately, for California, you owe the 1.5% (minimum $800) franchise tax on company income whether you're an LLC or S-Corp or C-Corp. In NYC, you are subject to the full corporate income tax rate, even as an S-Corp.

That explains why I suddenly had to start paying NY taxes, even though I live in Illinois (we started filing differently).

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