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View Diary: Mitt Romney reveals his magical tax plan math. And it looks just like Bush's. (152 comments)

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  •  I don't have any profits (0+ / 0-)

    I only have income, so it's immaterial in my case. I didn't spend a lot of time studying the differences and I choose an S-Corp because it seemed like it would be the simplest to establish and operate.

    "The smartest man in the room is not always right." -Richard Holbrooke

    by Demi Moaned on Wed Oct 10, 2012 at 11:37:25 AM PDT

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    •  I am partner in an S Corp (1+ / 0-)
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      Demi Moaned

      Number of employees in immaterial.  The issue is number of partners.  When it was set up, the C Corp tax rate was higher than the individual tax rate, that's why we used an S Corp.  Employees do not affect S Corp earnings differently than C Corps.

      Also Old Left Good Left is correct that S Corps do not have to pay out all earnings.  The downside of S Corps is whether or not the earnings are paid out, partners are taxed on their share of the earnings.  It's fairly typical that I am hit with X earnings to pay individual taxes on, but only get X/2 in dividends.  I am not taxed on X/2 but on X.

      In capitalist America, bank robs you!

      by madhaus on Wed Oct 10, 2012 at 09:15:38 PM PDT

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      •  Well that's clear and I kind of knew that (0+ / 0-)

        ... i.e., I knew that the earnings did not have to actually be disbursed but that you were taxed on them as income nonetheless. From that point of view I didn't see the point of ever leaving the money in the corporation. But based on your explanation I see that there might be more to it than that.

        "The smartest man in the room is not always right." -Richard Holbrooke

        by Demi Moaned on Thu Oct 11, 2012 at 04:05:54 AM PDT

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        •  You would leave money in the corp to use as (1+ / 0-)
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          Demi Moaned

          Retained earnings to invest in its growth.  The. Your partnership would be worth more and would enable larger earnings in the future.

          In capitalist America, bank robs you!

          by madhaus on Thu Oct 11, 2012 at 12:11:04 PM PDT

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