Size up your business structure – Despite tax rate extensions, still a useful endeavor

Description

Abstract: In 2010, the possibility of a rise in individual tax rates had many business owners questioning whether so-called “pass-through” entities were still viable. The tax law that passed in December postpones a tax rate increase until 2013. Nonetheless, there’s never a bad time to size up one’s business structure. This article discusses the pros and cons of operating as either an S corporation or a C corporation, or as a limited liability company (LLC). A sidebar looks at some of the specific factors that should be considered if converting from an S to a C corporation.