In addition to the 1099 nightmare, there's also the S-corp self employment tax nightmare where all s-corp income has the 15.3% self-employment tax imposed, not

In addition to the 1099 nightmare, there's also the S-corp self employment tax nightmare where all s-corp income has the 15.3% self-employment tax imposed, not just the earned income. I predict a mass switch to C-corps. From http://www.businessbrief.com/feds-take-aim-at-small-biz-loopholes/ http://www.businessbrief.com/feds-take-aim-at-small-biz-loop... Both House and Senate bills address what some lawmakers see as evasion of employment tax by certain individuals. The Internal Revenue Service has stated that many taxpayers receive nominal salaries and take their earnings through distributions by S corps., limited partnerships, or other entities. The House and Senate bills would change that situation by imposing self-employment payroll taxes on 100% of S-corp. pass-through income when: - The S corp. is engaged in a professional service business, with the key assets being the reputation and skill of no more than three employees, or - The S corp. is a partner in a professional service business.