entity choice Archives

When partners pay expenses related to the business

May 2, 2024 | Small Business

If you’re a partner in a partnership business, can you deduct expenses you incur on your personal tax return? Here are the rules.

How business owners may be able to reduce tax by using an S corporation

Sep 7, 2020 | Small Business

Do you conduct your business as a sole proprietorship or as a wholly-owned limited liability company (LLC)? If so, you’re subject to both income tax and self-employment tax. There may be a way to cut your tax bill by using an S corporation. Self-employment tax basics...

Which entity is best for your new or existing small business?

Jul 15, 2019 | Small Business

The Tax Cuts and Jobs Act (TCJA) has changed the landscape for business taxpayers. That’s because the law introduced a flat 21% federal income tax rate for C corporations. Under prior law, profitable C corporations paid up to 35%. The TCJA also cut individual income...

When are LLC members subject to self-employment tax?

Mar 25, 2019 | Small Business

Limited liability company (LLC) members commonly claim that their distributive shares of LLC income — after deducting compensation for services in the form of guaranteed payments — aren’t subject to self-employment (SE) tax. But the IRS has been cracking down on LLC...

Fundamental tax truths for C corporations

Feb 18, 2019 | Small Business

The flat 21% federal income tax rate for C corporations under the Tax Cuts and Jobs Act (TCJA) has been great news for these entities and their owners. But some fundamental tax truths for C corporations largely remain the same: Double Taxation Double taxation occurs...

Tax reform expands the cash method of accounting

Dec 10, 2018 | Small Business

Under the Tax Cuts and Jobs Act (TCJA), many more businesses are now eligible to use the cash method of accounting for federal tax purposes. The cash method offers greater tax-planning flexibility, allowing some businesses to defer taxable income. Newly eligible...

Assessing the S Corp after Tax Cuts and Jobs Act

Sep 4, 2018 | Small Business

The S corporation business structure offers many advantages, including limited liability for owners and no double taxation (at least at the federal level). But not all businesses are eligible. And, with the new 21% flat income tax rate that now applies to C...

Choosing the best business entity structure post-TCJA

Jul 2, 2018 | Small Business

For tax years beginning in 2018 and beyond, the Tax Cuts and Jobs Act (TCJA) created a flat 21% federal income tax rate for C corporations. Under prior law, C corporations were taxed at rates as high as 35%. The TCJA also reduced individual income tax rates, which...

Material participation key to deducting LLC and LLP losses

Aug 10, 2017 | Small Business

If your business is a limited liability company (LLC) or a limited liability partnership (LLP), you know that these structures offer liability protection and flexibility as well as tax advantages. But they once also had a significant tax disadvantage: The IRS used to...

Keep your real estate out of your business to save tax

Jul 13, 2017 | Small Business

It’s common for a business to own not only typical business assets, such as equipment, inventory, and furnishings, but also the building where the business operates — and possibly other real estate as well. There can, however, be negative consequences when a...

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