Christine Hradsky No Comments

QBI Deduction Provides Tax Break to Pass-Through Entity Owners

QBI Deduction

A new tax deduction for qualified business income from pass-through entities might offer temporary relief for pass through entities that won’t benefit from the reduced federal income tax rate.

The IRS recently issued proposed reliance regulations to help clarify the new qualified business income (QBI) deduction that was introduced as part of the Tax Cuts and Jobs Act. This guidance is complex and hundreds of pages long. As part of the proposed regs, the IRS explained that, if certain requirements are met, individuals, estates and trusts (all referred to as “individuals” by the proposed regs) that own interests in more than one qualifying trade or business can (but aren’t required to) aggregate them, by treating them as a single trade or business. Read more

Christine Hradsky No Comments

How Tax Reform Affects Tax Planning for C Corporations

C Corporations

From a reduced corporate tax rate to expanded depreciation breaks, the Tax Cuts and Jobs Act (TCJA) provides a host of favorable changes for C corporations, including personal service corporations.

One of the biggest changes under the Tax Cuts and Jobs Act (TCJA) is the permanent installation of a flat 21% federal income tax rate for C corporations for tax years beginning after 2017. The new 21% rate applies equally to personal service corporations (PSCs). (Under prior law, PSCs were taxed more heavily than other C corporations.)

This is great news if you own or manage a C corporation, including a PSC. Here are some specific tax planning considerations for these entities under the TCJA. Read more

Christine Hradsky No Comments

Should Your Business Be a C Corporation or a Pass-Through Entity?

business structure

Choosing a business structure isn’t a cut-and-dried issue, there are many factors that play a part in deciding what is the best avenue for you.

The Tax Cuts and Jobs Act (TCJA) introduced a flat 21% federal income tax rate for C corporations for tax years beginning in 2018 and beyond. Under prior law, profitable C corporations paid up to 35%. This change has caused many business owners to ask: What’s the optimal choice of entity for my start-up business? Read more