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Certainly, on the face of it, the argument appears compelling for S-Corps to switch, having previously shied away from such consideration given the onerous double tax that accompanied C-Corp status – at both the entity level, and secondly, upon distribution of dividends to shareholders. The operative word here, though, is qualified.
Earlier this month I hosted Ryan Clower, a CPA from the accounting firm M. I am a CPA, down here certified in the great state of Texas and really just stoked to be here. How you get that money out of the corp, where you have to give to yourself either as owner wages, or you have to give to yourself as dividend income.
Professionally, I am a Certified Public Accountant (CPA), may also be called a Chartered Accountant (CA) on your side of the globe, a Finance Charter-holder and a Certified Financial Planner. I am first generation high school, college and post graduate in my family’s lineage. English is my fourth of five tongues.
by Lance Christensen, CPA, partner at Margolin, Winer & Evens LLP. The change may motivate many companies to terminate their S-Corp elections or otherwise transfer their operations to C-Corps. Currently, the highest corporate income tax rate is 35% and the highest individual tax rate on qualified dividends is 20%.
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