In Part 1 of this two-part series, we discussed the pros and cons of forming a sole proprietorship and a single-member LLC (taxed as a proprietorship).
In Part 2, we discuss what the three possible corporate forms of business have to offer.
You’ll get the whole story (the good, the bad, and the ugly) when you read my new article titled Tax Tips: Choosing the Right Entity for a Newly Acquired Business (Part 2).
Here’s just some of what you’ll learn:
The S corporation option.
- Why liability protection is a key benefit
- Why “pass-through” taxation can save you money
- Why it can minimize Social Security and Medicare taxes
- Why tax-law restrictions can prove difficult
- Why partnership tax rules are better in one way
The “regular” C corporation option.
- Why liability protection is a key benefit
- Why graduated corporate income-tax rules can save you money
- Why you can profit from tax-favored fringe benefits
- Why double taxation of dividends can be a problem
- Why double taxation on stock-sales gains can hurt you
The qualified small business corporation option.
- Why you have to satisfy three important requirements
- Why you must also satisfy an “active business” requirement
- Why you can possibly get a 100% gain-exclusion break
- Why you can possibly get a gain rollover break