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Is your LLC and S Corporation going to be Taxed at 25%?

by | Oct 26, 2016 | as Corporation, business tax, irs, LLC, tax reform

Congress refuses to actually simplify the Internal Revenue Code. Since the 1986 tax Reform Act, Congress has passed more than 30,000 amendments to the Internal Revenue Code. Instead of simplification, Congress is now proposing a disguise tax increase for businesses.

Under our present federal corporate structure, if an individual owns a limited liability company or a sole proprietorship, the entity is not tax separately. Rather the income is added to the individual’s own tax. That is also true for partnerships and limited partnerships. Congress wants to change this to add a 25% tax at the business level. This will mean that small businesses will now be facing the same double tax problem that large businesses have. In addition there will have to be a whole series of new forms and a complete rewrite of a portion of the Internal Revenue Code for this new scheme.

Instead of moving in the right direction, Congress is moving in the wrong direction!

Please see this interesting article discussing some of these issues in further detail: