Tax Cuts and Jobs Act Impact- Guide to Choice of Entity

The Tax Cuts and Jobs Act is considered the most sweeping tax law change in decades, and, for many individuals and businesses, the massive and complex changes will have a profound impact. This includes the impact on choice of entity decisions, affected by how C corporations and pass-through entities will be taxed under the new Act. These drastic changes may cause many businesses to reconsider their current entity structure. The all-new CCH® AnswerConnect: Tax Cuts and Jobs Act Impact - Guide to Choice of Entity discusses the factors involved in choosing a form of business entity. The options available include being taxed as a C Corporation, where the entity is responsible for paying taxes, or being taxed as a pass-through entity, where the individual owner of the entity is responsible for paying the tax. With this authoritative guide you will gain a more solid understanding of the tax implications of choice of entity, the advantages and disadvantages of changing entities and the factors to consider before making that decision. The CCH Answer Connect Guide on Choice of Entity discusses the factors involved in choosing a form of business entioty after the Tax Cuts and Jobs Act.. Basically the choice is either a C Corporation where the entity is responsible for paying the taxes or a Pass-Through Entity (S Corporation or Partnership) where the individual owner of the entity is responsible for paying the tax. Factors to be considered in making this choice include, among others, the number and types of owners, the jurisdctions in which the business operates, the type of business and industry and the desired tax treatment.. Many businesses may feel that the tax treatment of a pass-through is more favorable because pass-throughs are not subject to a double tax and pass-throughs are able to utilize the capital gain tax rate on the eventual sale of the assets of the business. Hiowever, the changes made to the corporate tax law by the TCJA, such as the reduced tax rate of 21% may make the C Corporation entity more attractive.

Robert W. Jamison, CPA, Ph.D., resides in Leesburg, Virginia. He is a Professor Emeritus of Accounting at Indiana University Purdue University Indianapolis (IUPUI). In addition to S Corporation Taxation, published annually by Wolters Kluwer, Dr. Jamison has been the author of several courses published by the AICPA, various universities’ extensions and state CPA societies. His professional experience has included employment with universities, and national and local CPA firms. His articles have appeared in the Journal of Passthrough Entities, The Tax Adviser, Journal of S Corporation Taxation, The Journal of Accountancy, Practical Tax Strategies, and various other publications. Professor Jamison has taught many professional education programs for national and local accounting firms and has developed material used in their continuing education programs. He has been a lecturer in AICPA and state CPA societies' programs and has developed and presented training material for several large accounting firms. He is also a coauthor of the 2018 Multistate Tax Guide to Pass-Through Entities, published annually by Wolters Kluwer. He is curator of Wolters Kluwer Answerconnect Topic “S Corporations” and subtopics thereunder. He is a contributing author to National Income Tax Workshop, published annually by Land Grant Universities Tax Education Foundation. He is a member of the AICPA S Corporation Technical Resource Panel and the Washington, DC based S Corporation Study Group.