As tax reform begins in America, many businesses might want to consider filing as a C corporation.
In an article from Inc., author Zoe Henry writes, “Most U.S. small businesses currently don’t qualify for the reduced corporate tax rate. The majority of small enterprises are structured as pass-through entities such as limited liability companies or S corporations, where profits are taxed according to the owner’s personal rate. While there is some tax relief in the bill for those pass-through firms–including a temporary ability to deduct up to 20 percent of income–many could access the permanent cut by converting to full-blown C corporations”.
In the article, Henry discusses:
- A smart business decision
- How long would it take to convert to a C corp?
- Taking the time to reorganize and avoid being double taxed
Henry continues, “While the reduction to the maximum corporate tax rate is written as permanent, it could change, Reitmeyer points out. For instance, Democrats could retake a Senate majority, and vote through changes to the law. If that happens, it would be far more complicated to convert back to an S corporation or an LLC than the other way around”. Have you considered a C corporation for your business?
To read more, see the full article from Zoe Henry in Inc.