C corporation vs. pass-through – What’s the right structure for your business?
Abstract: The Tax Cuts and Jobs Act slashed the federal corporate income tax rate to a flat rate of 21% and eliminated the corporate alternative minimum tax (AMT). Meanwhile, owners of pass-through entities — partnerships, S corporations and LLCs — are taxed on their shares of business income at individual rates as high as 37%. This article explains factors to consider in determining whether organizing a business as a C corporation would reduce one’s overall tax burden. A sidebar examines additional factors to consider when determining the ideal structure for a business.