Your tax strategy starts with the basics.
The most basic element of your business is one of the most critical to your tax planning strategy. Your company's entity structure affects not only your company’s taxability, but also its benefits, risk exposure and owners’ wealth accumulation. As a nationally recognized tax, accounting and business solutions provider, CBIZ is uniquely positioned to help you with your company's entity selection. Our tax professionals have a depth of expertise serving the range of businesses. We evaluate the tax attributes of each entity type, consider what assets your business has or will have and determine how the different entity options affect your business financing or liquidation.
Entity structuring is effective not just for new businesses, but also for existing businesses that may need to accommodate new acquisitions or goals. If you believe your business strategy has changed since your company's initial entity selection, you should also consider the benefits entity restructuring could bring to your operations.
Owners of C corporations are subject to double taxation. Though there are ways to mitigate the adverse affects of the corporate level tax during a normal business year, the double taxation makes certain elements of business more costly. Selling a C corporation triggers double taxation. Holding real estate inside a C corporation can also magnify the double taxation issue.
Partnerships & LLCs
Partnerships and limited liability companies (LLC) have become increasingly popular entity structure options. LLCs and partnerships are taxed the same way, unless an LLC elects otherwise when it’s formed. These two entity structures receive the pass-through benefits of S corporations but provide additional flexibility.
S corporations benefit from pass-through taxation. They also use stock as a form of ownership interest. An S corporation requires careful planning and ongoing monitoring in order to deal with the many concerns surrounding shareholder basis and distributions.