Tax reform legislation and the formation of optometric group practices

Tax reform legislation through 1987 was analyzed for its impact on whether a partnership form of group practice or a professional corporation form is more advantageous from a federal tax standpoint. The effect of new tax legislation on pension plan contributions and on the deductibility of fringe benefits is delineated and discussed. Several miscellaneous changes in the law affecting group practice modes are discussed. Even though the individual income tax rates are now slightly lower than the corporate income tax rates, there is still life left in the professional corporation form of group practice if the Subchapter S election is made.