Louis Vlahos, partner at Farrell Fritz is mentioned in this article.
C-Corp offers tax treasures and traps as new code takes effect
Business people lately are eager to form or continue as C-corporations in light of lower taxes for these entities under new laws, but accountants said the devil may be in the details, potentially leading to double taxation.
The new tax code dropped taxes for C-corps from 35 percent to 21 percent, pleasing firms already with that structure and attracting attention from other companies. Pass through entities’ income, on the other hand, is taxed at individual rates, which are frequently higher.
Accountants lately have been doing studies for companies, advising them whether they should switch or stay put with their corporate structure. And they say if you decide to switch, without examining things carefully, you could end up hit with additional taxes.
“The corporate tax rate is 21 percent. The individual is 37 percent. That automatically causes a business person to say, ‘Maybe I should be a C-corporation,’” Timothy Speiss, partner in charge of the personal wealth advisors practice at EisnerAmper with Long Island operations in Syosset, said. “It’s going to be a different decision for each person. Over the next six months, you should be consulting with your tax and business advisor.”
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Reprinted with permission from Long Island Business News, July 2018.