I'm hearing the S corp passthrough provision is not going to include professional services companies. As a part owner of an engineering company that is a S corporation, that sucks.....
So the rate would be higher than it is currently?
Nope it would stay the same. Treated as personal income subject to higher tax brackets.
It's very confusing. I was reading up on it, and I think you are correct. I don't think my S Corp falls in that category and I'll be in the 25% bracket. However, a lot of my customers are landscapers and stone masons that are small and I think they may fall into your category which would be bad for me. In addition to that, the 25% rate isn't really much less than we're at right now I think. Not sure how it's going to help my company. We might end up changing to a C Corp.
Last night on the way home, I was listening to Hannity on the radio. He had on some congressman on and was talking about the plan as a whole. He did mention that they have some work to do when it comes to S Corps. Hopefully they will fix this.
This is from Bloomberg, so take it for a grain of salt, but it explains why they did it this way.
https://www.bloomberg.com/view/articles/2017-09-28/the-trump-tax-reform-s-pass-through-boondoggle
