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Choosing a Business Structure

Feb 5, 2020 8:15:00 AM / by The Retirement Group posted in CAM Annuity, Chevron, ERB, ESRO, ExxonMobil, Financial Planning, Hewitt, In Service Withdrawal, Lump Sum, Northrop Grumman, Option 1 Withdrawal, Pension, Pension Options, Retirement, Retirement Planning, Verizon, 401K, 72t, Age Penalties, Benefit Commencement Date, Workshops, TRG, Structure

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In March 2015, about 679,072 new business had been created in the preceding year.(1) All individuals pursuing the dream of exercising their entrepreneurial muscles, will face the same question, “Which business structure should I adopt?”

Each option presents its own set of pros and cons. To complicate matters a bit, the 2017 Tax Cuts and Jobs Act created several key changes that may benefit certain business structures. For example, the new law added a 20-percent deduction of qualified business income for certain pass-through entities. However, service industries (e.g., health, law, professional services) are generally excluded, except where income is below $315,000 for joint filers and $157,500 for other filers. This provision is set to expire December 31, 2025.

This overview is not intended as tax or legal advice and may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding the most appropriate business structure for your organization.

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