Uncategorized - The S Corporation Association

S-Corp Comments on Section 4960 Excise Tax

The S Corporation Association sent comments to the Department of Treasury today raising concerns that recent guidance it published has the potential to impose the new, Section 4960 excise tax onto private operating companies.

The tax is supposed to be targeted at big non-profits and universities that pay their executives and coaches salaries in excess of $1 million per year, but due to expansive definitions of “employee” and “related organization” included in the department’s guidance (Notice 2019-09), the tax could be paid by many family businesses with related foundations and other charities instead.

Worse, the new law is written in such …

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admin2019-05-29T14:58:59+00:00May 29, 2019|

S-Corp Thanks its Champions

With tax reform passing the Congress in the next few hours, S-Corp sent a note of thanks to those members of the Senate – Johnson, Daines and Inhofe – who stood up for Main Street businesses at a most critical time. As the letter states:

Thank you for your outstanding leadership to promote tax fairness for thousands of American Main Street and family businesses throughout consideration of H.R. 1, the Tax Cuts and Jobs Act.

Because of your efforts, the final conference agreement included a number of improvements, including provisions directly aimed at addressing …

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admin2019-02-06T18:49:36+00:00December 20, 2017|

S-Corp Concerns with Senate Tax Reform Bill

Top Line

The Framework and rhetoric leading up to its release indicated that Senate Leadership and the Finance Committee were committed to treating the millions of companies organized as pass-through businesses fairly in relation to C corporations. The Framework explicitly called for a rate differential of five percentage points, while previous Finance Committee work focused on leveling the playing field between C corporations and pass-through businesses by eliminating the double corporate tax and moving the entire business community towards a single, reasonable level of tax on all businesses.

Unlike much of the business community, S-Corp fully supported both efforts and expressed that …

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admin2021-08-16T14:02:12+00:00November 11, 2017|

House Tax Reform and S Corps, Part II

The Ways and Means Committee is likely to wrap its tax reform markup today. The bill presents many challenges to pass-through businesses that are unlikely to be fixed today. Here are some quick hits on what we’re seeing.

Reality v. Rhetoric

We continue to hear from S corporations who believe they will get a 25 percent tax rate under this bill. As we reported earlier this week, most businesses won’t see anything even close to the 25 percent rate. Part of the confusion is the rhetoric coming out of Congress. For example, here’s one description from the House:

That’s not …

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admin2019-01-31T22:46:38+00:00November 9, 2017|

House Bill & S Corps

The House tax reform bill to be considered this week has a headline top rate of 25 percent for S corporations and other pass-through businesses, but in many cases the real rate is significantly higher. S corporation owners need to pay attention.

Here are some of key details:

Professional Services: First, the 25 percent rate doesn’t apply to professional service businesses. Specifically, the bill excludes businesses engaged in “the performance of services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, any trade or business where the principal asset of such …

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admin2021-08-16T14:02:16+00:00November 6, 2017|