, the income is tallied at the corporate level but then flows through to each shareholder with all income taxes paid at the individual shareholder level.
For individuals, domestic qualified business income from a partnership, S-corp
or sole proprietorship, the new law generally allows a deduction of 20%, subject to a sunset at the end of 2025, KPMG said.
Third, because of the new rates for businesses, some might be better off moving from an S-corp
back to a C-corp.
For affluent SBOs who can count on significant S-corp
profits, that's not much of a concern.
Self-employment taxes are one area where S-corps
may have an advantage over partnerships.
For clients that are self-employed or own corporations (usually S-Corps
), that means that an SEP plan can be established and a contribution made for 2013 all the way up to October 15, 2014.
Further, businesses organized as "S-corps
" -- which pay taxes through the individual tax code and not the corporate tax code as "C-corps" do -- will see tax rates rise if Congress agrees with Democrats to lift rates on income above $ 200,000.
The Senate is poised to begin debate on its own student loan bill the week of May 7; however, their version of an extension would be funded by raising taxes on some S-Corps
, C-Corps, LLCs and S-elected LLCs provide the same asset protection, provided owners are compliant with all necessary requirements.
It could be argued that the current distinction between corporate and noncorporate business income obscures the economic contributions of certain small businesses organized as Subchapter S-corporations (S-corps
* Comparison of cooperatives with other contemporary business models (limited liability corporations and partnerships, S-Corps
Premiums for long term care insurance are deductible for S-corps