As you may be aware, major tax reform legislation may be passed this year and could mean sweeping changes to the tax code for the first time in about 30 years. Although the bill has only recently been proposed and the timing of its passage is uncertain, businesses should be aware of the bill that has been released.
The corporate rate cuts would be significant. The bill proposes a 20% corporate tax rate for most corporations with a 25% corporate tax rate for personal service corporations. The bill also significantly alters the treatment of income from passthrough entities. Businesses conducted as sole proprietorships, partnerships, or S corporations would be subject to a special passthrough maximum rate of 25% for business income. The bill includes methods to combat classification of compensation into business income. Read the full article here.