The new tax act reduces the tax rate for so-called C corporations (any corporation that does not elect to be taxed as an S corporation) to a flat rate of 21%.
That has a lot of people who operate businesses as sole proprietorships and pass-through entities (partnerships, S corporations and LLCs taxed as partnerships) thinking about whether they should incorporate to take advantage of the 21 percent rate, which is now significantly lower than both the highest rate for individuals (37 percent) and the highest effective rate for qualified business income from pass-through entities (29.6 percent).
On its face it might look like a no-brainer, but before jumping on the bandwagon consider these issues.
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