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As Tax Day 2024 approaches, we encourage independent agency owners to meet with their tax expert to review their current tax structure and to better understand the tax implications of a potential sale now, or sometime in the future. Ask your tax expert to lay out various scenarios for you and to help you determine if you are structured to minimize your yearly tax burden, and the tax liability you will face when you eventually sell your agency.
|Current law
The Tax Cuts and Jobs Act went into effect in 2018, and the law had specific implications for independent insurance agencies, depending on how their business is organized. Agencies that are organized as C-Corps received a substantial cut to their corporate tax rate, which was lowered from 35% to 21%. These tax cuts are permanent.
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