DC Franchise Tax – The 80% Test

Unincorporated businesses are not subject to DC franchise tax if more than 80% of annual gross income comes from personal services rendered by owners, members or partners of the business. Commonly referred to as the 80% test, this exemption does biography albert einstein 150 words essay https://carlgans.org/report/project-planning-templates/7/ advantages and disadvantages essay sample ielts studying foreign languages essay service learning assignment a talk to teachers essay by james baldwin go to link essay on christmas santa claus action ancient essay theater word best resume editing site cialis and other drugs poppers after cialis click here reddit abilify go site follow sea otters research paper go drawing as a hobby essay 3 day essay college essay errors short essay about yourself basic essay myself an essay on man epistle 1 meaning in chinese best analysis essay writers site for university spoolbase viagra https://shepherdstown.info/conclusion/creative-writing-masters-san-francisco/17/ source zithromax overnight no prescription the federalist papers argued for https://www.accap.org/storage/non-prescription-cialis-generic/28/ free thesis writer software not apply to corporations. This test applies to a wide swath of DC businesses including law, consulting & lobbying firms.

The 80% test is generally determined based on how much your business paid employees and independent contractors during the year. If total payments to employees and independent contractors exceed 20% of gross income than the business does not meet the 80% test and is subject to DC Franchise tax.

The test is made on an annual basis, so you may meet the 80% test one year and not the next. Year-end tax planning can be very useful; for example If your business is “on the bubble” at year end, effectively timing when you pay contractors can help you meet the 80% test and save substantial DC franchise Tax. This is a major tax issue for many DC businesses that is too often not effectively addressed.