The White House announced the tax reform program on April 26. The Trump government plans to lower the corporate income tax rate (1120C) from the current 35% to 15%. Under this framework of the new tax rate, will the four types of company tax (C Corp, S Corp, Partnership & Disregarded Entity-LLC) face new choices and interactions?

Lastly, let us look at Disregarded Entity. If this entity is owned by individuals, it is regarded as Sole Proprietor and should be filed on individual 1040 Schedule C. Compared to S Corp and Partnership, it has its own advantages:

1. The losses of S Corp or Partnership are divided into "active" and "passive" types. There are restrictions on passive losses. (Singles' annual household income should reach USD75,000, or married couples' joint income USD150,000, and the yearly losses cannot exceed USD25,000). But, "passive" type does not exist in Sole Proprietor (1040 Schedule C), unless it is transferred to 1040 Schedule E.
2. Many S Corps or Partnerships wish to declare "home office" on 1120S or 1065 forms, but it is hard to be accepted by IRS. On the other hand, as long as there are profits, "home office" can justifiably be deducted on 1040 Schedule C. Further more, expenses such as mortgage interest, land tax, rent, house depreciation, house repair, utilities, Internet, etc. can be deducted also.