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S-Corp Election
Posted on 1/25/13 at 9:17 am
Posted on 1/25/13 at 9:17 am
So I am an LLC and I want to stay an LLC. What is the cons of doing an S-Corp Election on my LLC? I have very high profits and I am tired of paying the 15% FICA on all of it. Any thoughs? Any extra state things I need to worry about?
3
Posted on 1/25/13 at 10:57 am to ColdDuck
S-corp accounting work will cost you a little bit more since you have to file a separate 1120S return. No state problems since LA gives you an s-corp exclusion. It all flows to your personal income tax return.
Posted on 1/25/13 at 11:57 am to ColdDuck
S-Corp is the tax savings for you and your business. Members of an LLC are subject to employment tax on the entire net income of the business. While only the wages of the S-Corp shareholder who is an employee are subject to employment tax. The remaining income is paid to the owner as a 'distribution' which is taxed at a lower rate if at all!
Posted on 1/25/13 at 8:37 pm to ColdDuck
You should definitely move to an S-corp, just make sure you pay yourself a "fair" salary.
Betters me that election soon before time runs out for 2013 elections,
Edit: I am a CPA, but its Friday night and I'm under the influence, so take that for waits it worth.
Betters me that election soon before time runs out for 2013 elections,
Edit: I am a CPA, but its Friday night and I'm under the influence, so take that for waits it worth.
This post was edited on 1/25/13 at 8:40 pm
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