Since I have mentioned forming a corporation a couple of times, maybe I should explain and inform you of what I am speaking about:
Essentially, a corporation is a legal entity that has “limited liability” separate from that of the individuals who own it. Both LLCs and corporations fall under this definition.
Practically speaking, the difference lies in the taxation formula and the amount of paperwork the company is willing to handle.
A C-corporation is subject to the standard corporate taxation structure after said enterprise goes through filing the necessary paperwork with the state.
A sort of middle path between C-corporations and LLCs are S-corporations, which do not pay any federal income tax directly.
Instead, S-corporation shareholders get apportioned the corporation’s income and losses and accordingly make the declarations and deductions on their individual income tax returns.