Corporations have many expenses and one of them is taxes. Every corporation pays taxes on their taxable income. How much corporations pay in taxes hinges on several factors like the country or state the business operates in as well as tax laws for those locations. Corporate income taxes are the third largest source of tax revenue in the U.S., so it helps fund programs and services for citizens like healthcare, education, infrastructure, and social security. How Do Corporate Taxes Work? Corporations are taxed on their profit or net income, which is the number they arrive at after deducting expenses from sales or revenue earned. C Corporations use IRS Form 120 to calculate their tax liability. With this tax form, corporations are able to include information like income, gains, losses, deductions, and credits to determine how much they’ll pay the IRS. State and federal corporate taxes have changed over the years and can continue to go up or down. The current federal corporate tax rate is a flat fee of 21%, and it has been so since the Tax Cuts and Jobs Act of 2017 was