Self-employment tax is one that no producer likes to pay, but the burden can be less if you structure your operation the right way, says Lance Fulton, tax consultant with Kennedy & Coe.
Fulton spoke about tax issues affecting agricultural producers at the Top Producer Seminar in Chicago this week.
The best way to deal with self employment tax is by utilizing multiple entities, Fulton says. Corporations don't pay self-employment tax and limited liability companies structured the right way don't pay self-employment tax, he says.
"Using multiple entities can spread out your tax burden over several tax brackets, it can eliminate self-employment tax and most importantly protect your assets and collateral,” Fulton says.
Look for more tax tips from Kennedy & Coe in future issues of Top Producer