Jerald David August quoted in “New Corporate Tax Rate has Hidden Catches”, the trusted professional
The new tax law enacted in December swapped out a graduated corporate tax rate topping out at 35 percent with a flat 21 percent rate across the board. While this provision, combined with the elimination of the corporate alternative minimum tax (AMT), might seem to have simplified matters considerably, attorney Jerald David August, a tax partner at Kostelanetz & Fink, LLP, who spoke at the Foundation for Accounting Education’s conference “Impact of the New Tax Law: a Sid Kess Workshop” today, pointed out some complicating factors.
Speaking at the NYSSCPA’s Manhattan headquarters, August said that while the new corporate tax rate is, on paper, 21 percent, other taxes from before the bill’s passage and new limits imposed afterward can erode the benefits for certain companies. He conceded that it is tempting to suddenly turn into a C corporation, and that the potential tax savings “does invite, in fact requires, an assessment of whether C is better.” However, he said clients need to go into the process with both eyes open.