|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LegalHelper.NET, the owner of this site, is not affiliated and does not claim to be affiliate with either
Legal Helpers, P.C. or the site legalhelpers.com
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Deductions. Benefits of incorporation include greater tax deductions for the business, your employees, and potentially for family members of business owners. Even if you are the only shareholder and employee of your business, benefits such as health insurance, life insurance, travel and entertainment expenses may be deductible. Incorporating may also eliminate self-employment taxes and lower payments for social security tax and Medicare tax. Your individual tax liability may also be reduced, as you will become an employee of the corporation.
Depending on the corporate income level, the federal tax rate can be as low as 15%, and a corporation, which is not a personal holding corporation, may own shares in another corporation and receive dividends, up to 80% of which are tax-free. Best of all, corporations usually provide an increased tax shelter for qualified pension plans or retirement plans (e.g. 401Ks), up to a certain amount. Corporate retirement and corporate medical plans can offer greater contribution limits and more flexibility than unincorporated entities. So, once your company is thriving, favorable tax treatment for fringe benefits can be a compelling reason to incorporate your business.
|
|
|
|
Return to all incorporate, llc facts
|
|
|
|
|
|
|
|
|
