It’s a fact.
The Tax Cuts and Jobs Act (TCJA) made the C corporation a lot more attractive than in the past. Why?
Because the TCJA created a flat 21% federal income tax rate.
That’s a heck of a lot better than paying the 37% maximum federal income-tax rate for individual taxpayers. And there are other reasons for favoring the C corporation.
However… we’re writing this article in the Tax Reduction Letter because we want you to be aware of…
The dark side of C corporations
Read my new article titled
Tax Tips: Beware of the Dark Side When Considering the C Corporation.
C corporations may make sense in some situations, but don’t ignore the very real downsides. Here are just a few:
- There’s double taxation of corporate dividends. Ouch!
- If you don’t pay out dividends, you can suffer the dreaded “accumulated earnings” tax
- Zeroing out corporate taxable income (with compensation paid to shareholder-employees) is NOT foolproof
- There are steep IRS-assessed taxes and penalties for bonuses that masquerade as dividends
- And lots more
Get full details when you read my new article titled
Tax Tips: Beware of the Dark Side When Considering the C Corporation.