Essay on Legal And Financial Implications Of Saving Money On Taxes
Choosing the Wrong Business Entity Can Increase Your Tax Liability
The two main business structures, a limited liability company(LLC) and a corporation both have unique tax, legal and financial implications. The right way to structure one business may be wrong for another, because what is right for one, may not be right for another, so it is important to structure your business in the best way to limit personal liability.
For example, did you know that corporations, ("C Corporations) and their shareholders are subject to double taxes? According to the IRS, corporations are taxed when a profit is "earned, and then is taxed to the shareholders when distributed as dividends.”
On the other hand LLC owners can pass profits through to owners to be considered regular income. have the option to be treated as a disregarded entity (like an “S Corporation”) which means that the LLC’s profits can be passed through to its owners to be treated like regular income.…