There has been a lot of buzz around the recently unveiled House and Senate tax bills. One of, if not the most heated discussion, revolves around the proposed slash in the corporate tax rate – it’s HUGE. As currently proposed, the corporate tax rate will be cut from 35% to 20%, with a few variances between the House and Senate bills.
A portion of the debate revolves around a theoretical difference on how larger corporations would use its newly found cash through the tax cut. Will companies expand domestic operations, in some cases even relocating HQ’s back to the U.S., stimulating the economy and furthering long-term growth, or will companies simply stockpile their cash or use it in ways to enrich their shareholders?
For the small and medium-size business owners, who do not worry about overseas HQ’s or what to do with their vault of cash, the nuances of a major change may be a bit more complexing. Without the assistance of in-house professionals, these business owners need to ask different questions; Under a new tax plan, does my current business structure align with the changes? How will this change the way I do business? What I am doing now, will it still be best? If not, how should I structure or restructure my company?
In general, small and medium-size business owners try to find ways to lower their financial burdens, ease the process of doing business, and simplifying their operations. This is often achieved through the various ways of structuring your business and the associated pros and cons of each. During times of change, the savviest of business owners will be looking towards sophisticated accountants and attorneys to ensure the continued achievement of business goals and the protection of personal interests.
If you have any questions regarding your business structure or the general implications of the tax bill, please feel free to contact us.
Foley Shechter LLP
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