Characteristics and Income Taxation of Business Entities
Free CFP Exam lesson in Tax Planning. 15 min read, ~2,254 words.
S corp advantage: salary subject to FICA, distributions are not. The salary must be "reasonable". Sole proprietors pay SE tax on every dollar of net profit. No salary/distribution split available. C corps face double taxation: 21% corporate + qualified dividend rate at shareholder level (~36.8% combined). QBI deduction (20%) phases...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- E.38
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