When looking to start a new business venture in Florida, the issues surrounding taxation can direct many of the decisions that an entrepreneur may end up making. For example, the traditional corporate structure is referred to as a C corporation. From a tax perspective, this type of business has historically paid relatively high taxes compared to some other models. This is because the corporation itself pays taxes and then the individual shareholders also must pay personal income taxes on their earnings from the corporation. That results in some monies essentially being taxed twice.
In recent years, other forms of business structures have been gaining popularity in part due to their simplified and reduced taxes. S corporations, for example, do not pay any corporate taxes at all. The only taxes paid are by the individual shareholders on their earnings but this is done on money that has not yet been taxed in contrast to the C corporation.
Now with a new administration in the White House, an effort is underway to change many elements of busines taxes. One of the potentially biggest changes would be the reduction in C coproration taxes to a mere 15 percent. If this is approved, these businesses may actually pay less in tax than their S corporation counterparts.
Business owners and entreprenuers in Floriday may find it helpful to talk with a business attorney about how to navigate these and other potential changes for their companies.
Source: The New York Times, “Under the Trump Tax Plan, We Might All Want to Become Corporations,” Neil Irwin, April 28, 2017