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Protecting Your Assets Limiting Liability in Your Business Structure Comparing the LLC and the Corporation Tax Implications of LLCs and Corporations Professional Service Corporations Tax
Protecting Your Assets Limiting Liability in Your Business Structure Comparing the LLC and the Corporation Tax Implications of LLCs and Corporations Professional Service Corporations Tax
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When comparing the limited liability company (LLC) and the corporation, you'll need to be aware of special tax implications that specifically affect corporations, but not LLCs.
A professional service corporation is a designation created by law. Professionals in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting (where the owners provide the services) may elect this business form.
The professional service corporation has to pay a flat tax of 35 percent on its earnings, rather than using the progressive rate structure that normally applies to corporations. The result will be higher taxes.
This tax scheme can be avoided by making the subchapter S election.
