The difference between an S-corp and LLC
An aspiring entrepreneur explores the different between an S-corp and an LLC. What do you recommend?
From Charlotte, NC Hi Peter.
It is true that you can avoid the self-employment tax (15.3%) with an S-Corp. However, any audit or revision form IRS or state will ask you for payroll expenses (wich is the same 15.3% tax) at least for owner(s) of the business. Some say the IRS expect you to withdraw at least 50% of the profit through payroll.
Elmer E. Nunez
M & N Solutions, Corp.
From John Chalawich, Waterford MI Hello Peter,
I am not sure if this is an open offer. However if it still remains that you would be willing to send out a complimentary copy of your S-corp book (which looks great by the way!) I would be most thankful. I am starting my own business and as a single owner with no associates, other than potentially my wife I need a bit more information to make the correct decisions. I thank you in advance for any information and or publications you may be able to offer or reccomend.
Have a wonderful day and once more… Thank you.
John M. Chalawich
Founder & CEO
JUST PERFECT DIGITAL
http://www.JustPerfectDigital.com
From Anonymous *For those who prefer the tax treatment of an S corp but like the simplicity of an LLC, there is an alternative worth considering: Forming an LLC that is taxed as an S corp. An LLC may make a special election with the IRS to be taxed as an S corp. This election is made on IRS Form 2553 and must be filed with the IRS before the 16th day of the third month of the tax year in which the election is to take effect.
From Jason Alejandro I'd love to get a complimentary copy of your book if possible, thanks.
Please find my contact info on my site: http://www.madebyarchetype.com
From Chris, Perryville MO I agree with Peter. This is the reason why I set our company up as an S Corp. That several thousands of dollars can be put towards our health insurance plan each year. Or makes a nice bonus.
From Peter Hupalo Hi Shara,
I just wanted to add one tax point to your discussion of S-corp versus LLC. A LLC taxed as a sole proprietorship or partnership has the owner pay self-employment taxes (about 16%) on all net income. An S corporation that doesn't pay money out to the owner as wages/salary, but retains that money for growth avoids this extra taxation. For some businesses this can amount to several thousand dollars a year saved in taxes. Of course, the downside to a corporation, is that even the CEO is an employee and you must deal with employment tax issues, even for a one-person corporation. But, for an extra $5,000 or so saved, many people are willing to accept the extra paperwork burdens.
P.S. If you'd like a complimentary copy of my book "How To Start And Run Your Own Corporation: S-Corporations For Small Business Owners," just let me know and I'll get a copy right out to you.
Peter Hupalo
Thinking Like An Entrepreneur
http://www.thinkinglike.com
hey peter I would like to check out that complimentery copy of your book “How To Start And Run Your Own Corporation: S-Corporations For Small Business Owners,” send me an email at rodger_marsh@yahoo.com and i will respond with shipping info. thanx