C C O R P O R AT I O N C O N V E R S I O N D I S C U S S I O N
I S I T W O RT H Y O U R W H I L E ?
PASS-THROUGH ENTITY
C CORPORATION
Tax Rate Top Rate of 37% Flat Rate of 21%
Tax Levels 1 Layer of Tax 2 Layers of Tax
• Individual tax rates apply • 21% corporate tax rate
• Individual capital gain rates
on dividends
Capital Gains Rates 0%, 15%, 20%, 23.8% - depending
on individual level of income No preferential rate, taxed at 21%
Owner Payment Options • Single member LLC;
tax-free draws once tax is
paid on profits • Regular wages, taxable
dividends
• Partnership; guaranteed
payments, tax-free distributions
once tax paid on profits
• S corps; regular wages,
tax-free distributions once
tax paid on profits
Charitable Contributions 60% limitation on cash at the
individual level (formerly 50%) 10% limitation on taxable income
at entity level, can carryforward
excess to future years
Loss Treatment Can offset a loss from one entity
with income from another Loss from one entity is contained
within that entity and must be
carried forward (limited to 80%
of taxable income)
Qualified Business Income
Deduction 20% deduction on Qualified
Business Income (limitations apply) N/A
Ohio Business Income
Deduction Up to a $250K deduction for
business income N/A
Ohio Business Income
Preferential Tax Rate Business income taxed at a 3%
rate as opposed to a top rate of
5% on non-business income N/A
(Single Member LLC,
Partnership, S corporation)
However, C corps do not
pay an Ohio tax on profit
However, C corps do not
pay an Ohio tax on profit
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