Characteristics and Income Taxation of Business Entities

Free CFP Exam lesson in Tax Planning. 16 min read, ~2,327 words.

S corp advantage: salary is subject to FICA, distributions are not; the salary must be "reasonable". Sole proprietors pay SE tax on every dollar of net profit, with no salary/distribution split available. C corps face double taxation: 21% corporate plus the qualified dividend rate (~36.8% combined). QBI deduction (20%) phases...