Rafael is thinking of starting an office supplies business specializing in home and office delivery. He is not sure what entity type is best from a tax perspective and needs your help. He projects that he will generate net cash flow and taxable income of $50,000 in his first year.

a. Compare and compute the difference in after-tax cash flow if Rafael structures his business as a C corporation which has a 21% flat rate or an S corporation that has income flowing to him on his personal return at a 24% rate.

b. What are some other concerns that Rafael should consider?