Posted by Dan(MD) on October 14, 2003 at 21:44:07:
I went through this very question about 6 months ago and I went to a see an accountant and left more confused than when I got there…then I went to a local real estate meeting where John Hyre was going to make a presentation and I asked him…so here is what I did (remember to take this advice with some skepticism since I’m not a lawyer or anything)
I ended up forming an LLC and I will file as an S-corp at tax time. I did this for two main reasons
LLC’s are easy
The real tax advantage to an S-corp is the social security tax savings as a self employed tax payer but since you have a regular job where you are paying SS tax you wont get that tax break. You max out your SS taxes at $88K (or so) income. Any income earned above that is not SS taxable (ie your lonnie deal income) so an S-corp may not be your solution.
Is there an advantage of setting up the LLC to file as an S-Corp?
Thanks for the wisdom…
Joe
P.S. Apologies for “yet another entity question.” If it’s worth anything, I did my due diligence in reviewing the archives before posting. You should have seen how confused I was before reading them!
Joe,
We can answer general questions here but this is pretty specific. Check with a local attorney / CPA that understands the ramifications…better yet, for advice from someone who specializes in this stuff, drop John Hyre an email and set up an appointment for a consultation. Well worth the investment (never used him in that capacity myself but heard him speak and he knows this stuff cold).
All the best, Lyal
