Posted by JHyre in Ohio on July 05, 2003 at 07:15:51:
I normally create S-corps the same way. The LLC provides better asset protection, while still providing the tax attributes of an S-corp. The price differential between returns shouldn’t be very large, because I’d charge extra to a 1040 with a Schedule C or an S-corp - the amount of work involved on either is normally comparable. See my article on choice of entity for an explanation of an S-corp can reduce (but not eliminate) SS/medicare taxes.
John Hyre
Creating an LLC but filing as an S Corp? - Posted by Dan (MD)
Posted by Dan (MD) on July 04, 2003 at 08:33:17:
I went in to see my attorney last week about setting up an S corp for flipping mobile homes (Lonnie style) and he suggested that I file an LLC instead due to its simplicity (I’m a one man show) and because I can file as an S Corp come tax time…anybody out there do it this way? is there any advantages to this?
I’ve talked to my CPA as well about it and he gave me this advice…
Filing as an S corp Pros
- Less likely to have personal return audited (since all the deals are accounted for in the S corp and not in my Schedule C)
- Helps with self employment taxes (I’m a little confused about this as well…is this just social securty taxes and/or medicare? - He also said that at approx 88,000 income level, all the social securty taxes have been paid…is that true? becuase my regular job income is above that level.)
Cons
- A second tax return needs to be filed at approx $300-$500 additional fee
Any advice here would be greatly appriciated
Thanks
Dan (MD)