The Unemployment Tax Bill that was just passed and signed into law is a shell of the original Am. Jobs and Closing Tax Loopholes Act that started in December, 2009. The original bill was reduced from hundreds of pages to about 4 – so some things must have been left out! One of those “things” was the threat of making owners pay payroll taxes on S Corp dividends. So we are off the hook for now – but don’t get too comfortable. Congress and the IRS have declared war on S Corp dividends. This, and many other things, were omitted from the current bill as a matter of expediency. The professional tax community expects the other shoe to fall soon. So, stay tuned…..
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