Re: 8832: LLC as Scorp or as Disregarded entity

[Guest guest]

We are an S Corp, incorporated in CA as a Professional Corporation.  The only problem is that the income the corporation makes is taxed to you personally, although I believe at a lesser rate than a corporation, which is why we chose to do it that way.  Incorporating did not get us some of the benefits that we thought it would (for example, in the state of CA there is a minimum $800 corporation tax, even if the Corp makes no money, and we had to personally guarantee our loans and lease initially), so we might have been better off being a sole proprietor to start.  However, now that we have been incorporated for 7 years, our new lease is not requiring a personal guarantee (so if we decide to up and move out of state and close the business before the lease is over, we are not held holding the bag), our loans are paid off (well, almost - only 6 months to go!), and we are set up to take on another provider into our corporation when we move to our new space, allowing sharing of overhead, better contracting, etc.

Good luck on starting your practice! Pratt

 

Hi all,

With the current talk about hiring, I have some business starting questions. Please dig in your memory if it has been a few years since you have set up...

Are you guys, who are LLCs, doing taxes as a disregarded entity (single person LLC), or as a S Corp.... and why? I opened recently and am a LLC as a disregarded entity, but am wondering if I can save some tax burden by doing that form 8832 (within a year allowed) and electing to change to be considered a S Corp.

Thanks for your thoughts!

P.J.

[Guest guest]

I'm in New York. Opted to be LLC. Can't remember the reason why but did ask my accountant today and he stated stay LLC as more costs with S corp. To: Sent: Wednesday, March 28, 2012 10:30 AM Subject: 8832: LLC as Scorp or as Disregarded entity

Hi all,

With the current talk about hiring, I have some business starting questions. Please dig in your memory if it has been a few years since you have set up...

Are you guys, who are LLCs, doing taxes as a disregarded entity (single person LLC), or as a S Corp.... and why? I opened recently and am a LLC as a disregarded entity, but am wondering if I can save some tax burden by doing that form 8832 (within a year allowed) and electing to change to be considered a S Corp.

Thanks for your thoughts!

P.J.

[Guest guest]

we were a LLC until yesterday. The original concept was that the taxes are the same in an LLC and SubS corp, but it turns out that this is not necessarily true. Our new accountant says that by being a Sub S, you can lower your " salary " and pay the rest

in dividends. The dividends are not taxed for SS, MDC and at a lower rate than salary. The costs for running either as essentially the same, the income is the same and so we are changing. Think it could save us $10,000 in taxes a year.

From: [ ] On Behalf Of Pratt [kpratt.1022@...]

Sent: Wednesday, March 28, 2012 8:50 AM

To:

Subject: Re: 8832: LLC as Scorp or as Disregarded entity

We are an S Corp, incorporated in CA as a Professional Corporation. The only problem is that the income the corporation makes is taxed to you personally, although I believe at a lesser rate than a corporation, which is why we chose to do it that way.

Incorporating did not get us some of the benefits that we thought it would (for example, in the state of CA there is a minimum $800 corporation tax, even if the Corp makes no money, and we had to personally guarantee our loans and lease initially), so we

might have been better off being a sole proprietor to start. However, now that we have been incorporated for 7 years, our new lease is not requiring a personal guarantee (so if we decide to up and move out of state and close the business before the lease

is over, we are not held holding the bag), our loans are paid off (well, almost - only 6 months to go!), and we are set up to take on another provider into our corporation when we move to our new space, allowing sharing of overhead, better contracting, etc.

Good luck on starting your practice!

Pratt

Hi all,

With the current talk about hiring, I have some business starting questions. Please dig in your memory if it has been a few years since you have set up...

Are you guys, who are LLCs, doing taxes as a disregarded entity (single person LLC), or as a S Corp.... and why? I opened recently and am a LLC as a disregarded entity, but am wondering if I can save some tax burden by doing that form 8832 (within a year allowed)

and electing to change to be considered a S Corp.

Thanks for your thoughts!

P.J.

[Guest guest]

I'm a PLLC in NC. Sounds like the same tax benefits I was told for my PLLC: I take 60% as income and 40% non-taxed as dividend. That was my understanding -- wouldn't be suprised if I misunderstood!Sent from my iPhone

we were a LLC until yesterday. The original concept was that the taxes are the same in an LLC and SubS corp, but it turns out that this is not necessarily true. Our new accountant says that by being a Sub S, you can lower your "salary" and pay the rest

in dividends. The dividends are not taxed for SS, MDC and at a lower rate than salary. The costs for running either as essentially the same, the income is the same and so we are changing. Think it could save us $10,000 in taxes a year.

From: [ ] On Behalf Of Pratt [kpratt.1022@...]

Sent: Wednesday, March 28, 2012 8:50 AM

To:

Subject: Re: 8832: LLC as Scorp or as Disregarded entity

We are an S Corp, incorporated in CA as a Professional Corporation. The only problem is that the income the corporation makes is taxed to you personally, although I believe at a lesser rate than a corporation, which is why we chose to do it that way.

Incorporating did not get us some of the benefits that we thought it would (for example, in the state of CA there is a minimum $800 corporation tax, even if the Corp makes no money, and we had to personally guarantee our loans and lease initially), so we

might have been better off being a sole proprietor to start. However, now that we have been incorporated for 7 years, our new lease is not requiring a personal guarantee (so if we decide to up and move out of state and close the business before the lease

is over, we are not held holding the bag), our loans are paid off (well, almost - only 6 months to go!), and we are set up to take on another provider into our corporation when we move to our new space, allowing sharing of overhead, better contracting, etc.

Good luck on starting your practice!

Pratt

Hi all,

With the current talk about hiring, I have some business starting questions. Please dig in your memory if it has been a few years since you have set up...

Are you guys, who are LLCs, doing taxes as a disregarded entity (single person LLC), or as a S Corp.... and why? I opened recently and am a LLC as a disregarded entity, but am wondering if I can save some tax burden by doing that form 8832 (within a year allowed)

and electing to change to be considered a S Corp.

Thanks for your thoughts!

P.J.