Yes, in PA, if you want to be licensed by the state board of accountancy, you must register as a PC, or one of the other acceptable forms to the board.
PC's are taxed like a c corp, everything is taxed at 35%, HOWEVER, this is not necessarily a bad thing;
Salaries are considered tax deductible
expenses and professional corporations typically pay 100% of income
as salaries to shareholders
or other kinds of benefits
, thereby reducing their taxable income
PCs can create retirement plans
and defined benefit savings plans with higher contribution limits than those available to sole owners and unincorporated businesses.IRS
will consider professional corporations as a PSC as long the business passes
(1)function and (2)ownership
(1)The function test requires that 95 percent of the activities carried out by the business are services within the fields of health, law
, accountancy, engineering, science, consulting or performing arts.
(2) The ownership test requires that the business' stock be owned by qualified people who either work or used to work for the corporation
Also, PCs get tax deductions
care and other benefits supplied to its employees. In these cases the expenses are tax deductible to the corporation (and are not considered taxable income to the employees).
Not a bad deal....