LLC or LLP ..?

[MedicareMutt]

So I write Medicare business and now my wife does also. I have an LLC but I'm wondering if an LLP (Limited Liability Partnership) would be a good idea? Does that affect taxes, etc ..?

 

[MichFlor]

I think you'd be better keeping the LLC. An LLC can be taxed as a S-Corp, which can save some significant $$$ once you have a large enough net profit.

 

[sman]

I think you'd be better keeping the LLC. An LLC can be taxed as a S-Corp, which can save some significant $$$ once you have a large enough net profit.

Let's hope the QBI deduction doesn't expire at the end of this year. Congress will have to pass a bill to prevent it from happening. It has saved me many of thousands of dollars each year since it passed in Trump's first term.

 

[DonP]

Let's hope the QBI deduction doesn't expire at the end of this year. Congress will have to pass a bill to prevent it from happening. It has saved me many of thousands of dollars each year since it passed in Trump's first term.

Freakin solo 401k is the most incredible vehicle on the planet . I put $73k in that in 2024 About 2 times what you can put in a Roth

 

[MichFlor]

Freakin solo 401k is the most incredible vehicle on the planet . I put $73k in that in 2024 About 2 times what you can put in a Roth

Yup! I love my Solo K.

The saving attained by paying yourself a "reasonable salary" and avoiding FICA taxes on the the S-Corp Net is pretty sweet too!

 

[sman]

Freakin solo 401k is the most incredible vehicle on the planet . I put $73k in that in 2024 About 2 times what you can put in a Roth

Yep, but I still want the QBI. Reducing 20% of your taxable profit is very nice. Why can't we have both?

 

[MedicareMutt]

I think you'd be better keeping the LLC. An LLC can be taxed as a S-Corp, which can save some significant $$$ once you have a large enough net profit.

Appreciate it. I have an S corp currently and yes, although it doesn't contribute to F.I.C.A, it does save that 15.3 % each year. It's been just me writing business in my name until recently, hence my question. I guess I'll get with the accountant to see if there is an upside to changing to a LLP ...

 

[Tahoe Ray]

I don't understand how an LLP would help you. That's normally a corporate structure to protect you from personal liability should your partner(s) make an error.

Being married to your partner would negate that protection.

Both are pass through entities but LLPs don't allow S corp election.

Obviously talk to your accountant but I don't see how this would be an advantage.

 

[MedicareMutt]

I don't understand how an LLP would help you. That's normally a corporate structure to protect you from personal liability should your partner(s) make an error.

Being married to your partner would negate that protection.

Both are pass through entities but LLPs don't allow S corp election.

Obviously talk to your accountant but I don't see how this would be an advantage.

Awesome, yeah, that bit about S corp availability was my #1 question ... cool ... that saves another 85 - 125 dollar shake down from the Ohio Secretary of State ... and ya can't get a straight answer or much help out of these droids ya know ..? Take your money A.S.A.P ... THAT they are excellent at ...

 

[marindependent]

The LLC is often the first step agencies take when incorporating, not the LLP. Not necesarily saying that following everyone is the best idea, but there are good reasons why.

Incorporating is a good idea, but its not the magic bullet many imagine.

I yield to @Tahoe Ray suggestion and concur.