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The LLC would pay 15%, but then you would pay your normal individual rate on top of that: 10%, 25%, or 35%. If you selected the LLC as a pass through entity, yo
by joshuaheard 10y ago
The LLC would pay 15%, but then you would pay your normal individual rate on top of that: 10%, 25%, or 35%. If you selected the LLC as a pass through entity, you could avoid the 15% tax on the LLC, and would pay your regular individual rate.
- amluto 10y agoThat would be a tax increase (currently the LLC pays nothing), and I don't think it's what's proposed. From the article: > Beyond cutting the tax rate to 15 percent for large corporations, which now pay a rate of 35 percent, Mr. Trump also wants that rate for a broad range of firms known as pass-through entities — including hedge funds, real estate concerns like Mr. Trump’s and large partnerships — that currently pay taxes at individual rates, which top off at 39.6 percent. I think Trump really is suggesting that, when you have income reported on Schedule K-1, you would pay 15% tax on that income.
- joshuaheard 10y agoAs I stated, there are two ways to tax an LLC: as a corporation (with a a separate proposed tax rate of 15%), and as a partnership (pass-through to taxpayer, no separate tax, taxpayer pays at individual rate). I posted the text of the plan, and there is no pass-through limit of 15%. There are no pass-through limits in the current law. If there was a 15% pass-through tax limit, it would be absurd, because everyone in the 25% and 35% tax brackets would just form LLCs and get paid through that. The Times is misconstruing the plan in order to give an absurd result, which they have done in the past with Trump.