Although S corporations are a tax choice, there are limitations on what corporate entities can make election. The biggest hurdles are:

1. There can be no more than 75 shareholders;

2. Each shareholder must be a person, not a business entity; and

3. There can be only one class of stock.

Benefits

While S corporations provide relief from tax filings of a C corporation, there are negative aspects to using them. Simply put, a C corporation can write off more expenses. S corporations may not be able to deduct certain types of insurance and costs of doing business. The list is fairly complicated, so you should speak with a tax professional prior to deciding which designation works for your business.

S Corporation vs. Limited Liability Company

S corporations have a definite tax advantage over limited liability companies [“LLC”]. Distributions from LLCs to shareholders are subject to self-employment tax [15.2 percent] in their entirety. Distributions from S corporations, however, can be broken down into two categories, salaries and dividends. The dividend distributions are not subject to self-employment tax. Avoiding self-employment tax can make a substantial difference in amount of money you take home.

In Closing

I always laugh when someone emphatically says that every business should be formed as a particular entity. Such statements are simply wrong. The “best” business entity depends entirely on nature of your business. In many instances, S corporations are ideal.

Which Credit Cards?

The incompetence of CardSystems Solutions will have an impact on every major credit card group. Estimated numbers range from about 20 million Visa cards exposed to 14 million MasterCard credit cards. As many as 4 million American Express and Discover accounts were also put on sacrificial altar by CardSystems.

What You Should Do

You should review all charges on credit card statements over next 12 months. Contrary to popular belief, hackers typically will not go out and charge up thousands of dollars on card. Instead, you should look for small charges of $10 to $20 from companies with bland names. Hackers know that many people will not call to reverse a small charge. Don’t be lazy! Closely inspect your statement and contest any charges that aren’t familiar.

Closing

How big is this hack? There are approximately 300 million people in United States. 40 million accounts equates to 1 in every 7.5 people. Yes, people carry multiple credit cards, but it is still a huge number. CardSystems Solutions should pay a heavy price for its incompetence. Frankly, it should be liquidated. There is little doubt major credit card companies will take action.