C corporation can be the right choice for many small entities because of the deductions it allows.
A C corporation enjoys a full deduction for the cost of employees (including owner employees) health insurance, group term life insurance up to $50k per employee and even long-term care premiums without regard to age-based limitations.
A C corporation can also deduct the costs of a medical reimbursement plan.
Lower Tax Rates for C Corporations
C corporations enjoy their own graduated rates.
Best of both worlds
Many medical practices can take advantage of both the C corp and S corp by setting up two distinct entities to operate different aspects of their practice. The S corp can be used for the operating side of the practice while the C corp can be used for the management functions. In this way, the medical practice as a whole can take advantage of both the tax deductions afforded a C corp and the flow-through advantages of an S corp.
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