With the expiration of the Tax Cuts and Jobs Act (TCJA) provisions looming in 2025, small business owners and tax practitioners who advise them are facing a significant dilemma: should they consider electing S corporation status in anticipation of a potential increase in the corporate income tax rate?
Recent discussions among House Republicans and Democrats suggest that a hike in the corporate tax rate may be on the table when Congress considers extending the TCJA tax cuts. Chair Jason Smith, R-Mo., of the House Ways and Means Committee, revealed that some well-known conservative House Republicans support such a hike. This revelation underscores the uncertainty surrounding the future tax landscape and the need for proactive planning.