Dividends: It’s the Least Tax-Efficient Way to Withdraw Money from a Corporation

THE LIMITIED liability company and S corporation are generally regarded as the entities of choice for closely-held businesses, in large part because the owners can access company cash tax-efficiently. However, for a variety of good non-tax reasons many businesses still operate as corporations without electing to be treated as an S corporation. These so-called C corporations generally find it more difficult to make tax efficient distributions of cash.

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