S-Corp Payroll Tax Hike Re-Emerges
Both the Camp discussion draft and the President’s budget include provisions to expand the application of payroll taxes to S corporation income.
The White House proposal is an expanded version of efforts that failed in the Senate in 2010 and 2012, where 100 percent of income from a professional services businesses – law, accounting, consulting, etc. – organized as an S corporation, general or limited partnership, or an LLC taxed as a partnership, would be subject to SECA taxes.
The Camp provision, on the other hand, is a whole new approach that is dramatically broader than anything considered to date. …