Small businesses often save taxes by operating as a sole proprietorship, partnership or S corporation–or operating as a limited liability company taxed as a sole proprietorship, partnership or S corporation.However, even though C corporations may cause a business to pay a second level of tax on business profit, a C corporation may save the small business owner taxes in at least three situations.C Corporations Allow for Richer Fringe Benefits to OwnersWith sole proprietorships, partnerships and S corporations, the tax-free fringe benefits available to owners are very limited. Sole proprietors, S corporation shareholder-employees, and partners can write off medical insurance and retirement account contributions. But not much else.In comparison, a C corporation can typically provide the same tax-free fringe benefits to owners as it provides to rank-and-file employees. These additional non-taxable freebies can include housing, educational assistance, life insurance–and several other items as well.A C corporation may also allow a business to provide better healthcare benefits for shareholder-employees. In other words, though this isn’t true for sole proprietorships, partnerships and S corporations, a C corporation may be able to discriminate in favor of corporate officers or shareholder-employees and provide them with better or more healthcare benefits.C Corporations May Minimize Income Taxes […]

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