Difference between revisions of "Smart Tax Saving Tips"

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Latest revision as of 12:48, 23 January 2025

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Getting to the decision of which legal entity to choose, let's take each one separately. The most widespread form of legal entity is this company. There are two basic forms, C Corp and S Corp. A C Corp pays tax according to its profit for the majority and then any dividends paid to shareholders one more taxed. Hence the term double-taxation. An S Corp however works differently. The S Corp pays no tax on profits. The gain flows by means of the shareholders who then pay tax on that money. The big difference discover that the 15.3% self-employment tax doesn't apply. So, by forming an S Corporation, your business saves $3,060 for the majority on a nice gain of $20,000. The tax still applies, but I'm sure someone would choose pay $1,099 than $4,159. That is an important savings.

Copyright 2010 by RioneX IP Group LLC. All rights ordered. This material may be freely copied and distributed subject to inclusion these copyright notice, author information and all the hyperlinks are kept undamaged.