Corporate Tax Rate

[beachFool]

Many really small businesses are "S" corps. It makes it significantly easier to comingle personal expenses, etc... with corporate ones and eliminates the double taxation of dividends.

Even for S-Corps there are plenty of real taxes that are dragging hard on small businesses are imposed by the ADA, OSHA, the EPA, the PPACA, etc... The reporting/conformance burden of big government oversight ways far more heavily on them than it does on large corporations.

Who told you that?

I hope you don't face an IRS audit and use that arguement.

Running personal expenses through your subchapter S corp is just as much a violation of IRS regs as in a C corp,.

Having a subchapter S corp allows the shareholder(s) to take distributions from the S crop and not pay Social Security and Medicare taxes.

The IRS has targeted highly profitable subchapter S corps for audit because their compliance models indicate there are high incidences of abuse.

 

[DuneAHH]

Who told you that?

I hope you don't face an IRS audit and use that arguement.

Running personal expenses through your subchapter S corp is just as much a violation of IRS regs as in a C corp,.

Having a subchapter S corp allows the shareholder(s) to take distributions from the S crop and not pay Social Security and Medicare taxes.

The IRS has targeted highly profitable subchapter S corps for audit because their compliance models indicate there are high incidences of abuse.

Do you know... what are the IRS' defining thresholds for "highly profitable" subchptr S corps?

 

[beachFool]

Do you know... what are the IRS' defining thresholds for "highly profitable" subchptr S corpsOTE]

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Not exactly.

I read that subchapter S corp and sole propreitors who clear 100K are more likely to be audited.

There are other audit triggrers like high deductions.

You should discuss your situation with a Certified Public Accountant.

Making less than 100K does not mean the IRS will not audit your return.

 

[DuneAHH]

Do you know... what are the IRS' defining thresholds for "highly profitable" subchptr S corpsOTE]

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Not exactly.

I read that subchapter S corp and sole propreitors who clear 100K are more likely to be audited.

There are other audit triggrers like high deductions.

You should discuss your situation with a Certified Public Accountant.

Making less than 100K does not mean the IRS will not audit your return.

I don't even have a 'situation' to discuss anymore !
However, I would observe that dogging 100K-sized small company/sole proprietorships, in the scheme of such ginormous big corporate abuses, strikes me as a pitiful ROI payback for the IRS at this juncture.

 

[Matt J]

I think our problem very closely related to your 'way too complicated' observation.

I think we also don't know when to quit taxing.

To me, the traditional double taxation of corporate dividends never made sense.

Why should I pay taxes on my share of the after-tax earnings of a corporation that i own a piece of? I could see the logic if the corporation could deduct the dividends off of their taxes, but they can't (it is an after tax item.)

If the corp is in the 39% tax bracket and the consumer is in the 36% bracket then each dollar of a corporations's dividend (profit) is effectively federally taxed at 59.74%. Tack another 6-12% for state taxes and that 1$ of earnings becomes about 30? in the stockholders hand. That's ridiculous.

We've had some respite from this lately, but unless something changed and I missed it, we return to full double taxation of dividends in 2011.

There's still a vast difference between someone who purchases a stock and then receives a return on their investment and someone who's actually performing a service.

 

[futurebeachbum]

Who told you that?

I hope you don't face an IRS audit and use that arguement.

Running personal expenses through your subchapter S corp is just as much a violation of IRS regs as in a C corp,.

Having a subchapter S corp allows the shareholder(s) to take distributions from the S crop and not pay Social Security and Medicare taxes.

The IRS has targeted highly profitable subchapter S corps for audit because their compliance models indicate there are high incidences of abuse.

I didn't say or even imply in any way that it is legal.

No one had to tell me it goes on, I experienced it time after time. Working for a conservative, publicly traded firm trying to acquire S Corps I finally gave up. I never found one with books that came anywhere close to 'clean' and the work to clean them up so that they could withstand the kind of scrutiny our auditors give overshadowed the value of the deal too much.

As an aside, most people can discern 'legal' from reality.

 

[DuneAHH]

I didn't say or even imply in any way that it is legal.

No one had to tell me it goes on, I experienced it time after time. Working for a conservative, publicly traded firm trying to acquire S Corps I finally gave up. I never found one with books that came anywhere close to 'clean' and the work to clean them up so that they could withstand the kind of scrutiny our auditors give overshadowed the value of the deal too much.

As an aside, most people can discern 'legal' from reality.

ROFL. I dunno why but the ironic comedic qualities of the bold/underlined statement transports me to front row audience seats at The Comedy Club or NYC's Improv.
Thanks! With this I bid G'Night

 

[beachFool]

I didn't say or even imply in any way that it is legal.

No one had to tell me it goes on, I experienced it time after time. Working for a conservative, publicly traded firm trying to acquire S Corps I finally gave up. I never found one with books that came anywhere close to 'clean' and the work to clean them up so that they could withstand the kind of scrutiny our auditors give overshadowed the value of the deal too much.

As an aside, most people can discern 'legal' from reality.

I'm confused.

Publicly traded companies CAN NOT be subchapter S corporations.

If a subchapter S corporation has more than 100 shareholders it HAS to operate as a C corporation.

 

[beachFool]

ROFL. I dunno why but the ironic comedic qualities of the bold/underlined statement transports me to front row audience seats at The Comedy Club or NYC's Improv.
Thanks! With this I bid G'Night

YouTube - Treetop Flyer

 

[futurebeachbum]

I'm confused.

Publicly traded companies CAN NOT be subchapter S corporations.

If a subchapter S corporation has more than 100 shareholders it HAS to operate as a C corporation.

I don't understand your confusion.

Are you saying that you believe that publicly traded C-corps cannot acquire S-Corps?

There is a whole field of M&A consulting build around the various tax treatments available to such an acquisition. If this is confusing to you, perhaps you should look into some training in the areas of finance and tax law.