S corporation owners have a key question: Is it time to switch to a regular corporation? We’ll look at some factors that come into play. Let’s first turn to the federal income tax rates. Tax reform slashed the corporate tax rate. Regular corporations, also known as C corporations, now pay federal income tax at a flat 21% rate… down from a top rate of 35% under prior law. Individual rates have also been lowered… But not as drastically. The maximum rate is now 37% for married filers with taxable incomes over $600,000 and single filers above $500,000. For 2017, the top rate was 39.6%. Another consideration is whether the entity plans to make regular dividends. C corporations still bear the burden of double taxation. Their profits are hit with the 21% corporate tax, and shareholders pay tax on dividends distributed to them. Individuals with incomes over $425,800 for single filers and $479,000 for joint filers will pay a 23.8% tax on qualified dividends, which includes the 3.8% Medicare surtax on net investment income. People with incomes below these thresholds pay lower rates of 0%, 15% or 18.8% on their qualified dividends, depending on their taxable incomes.