It might be tempting for small business owners, and their advisors, to contemplate the higher tax rates on individuals spawned by the American Tax Relief Act, and conclude that switching their S corporation to a C corporation makes sense.
ATRA, passed to avert the fiscal cliff, raised tax rates for highest income individuals to 39.6 percent, alongside the 3.8 percent Medicare tax for married taxpayers with adjusted gross income over $250,000 ($200,000 for single taxpayers).
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