- Thread starter
- #21
Thanks everyone. Seems like the consensus is to contact an good CPA. Will do. Working on my business plan....
S or LLC Corporation?
- Thread starter HuntAssuranceGroup
- Start date
- 1,473
If u make decent money just fork the cost to hire a good CPA they are with the money.
- 687
I was thinking about getting my EA (Enrolled Agent) and was researching it on the web and came across a site stating statistically that more returns are audited that are prepared by EA's and CPA's then any other type of return. I am not about to validate the statistic but it is a topic worth researching...that is what type of prepared returns have the highest chance of getting audited.
- 882
My take:
Free Legal advice is worth what you pay for it.
I wouldn't just check with my CPA, but I'd also check with a good business attorney.
I've had all three over the years in different states. I've found that some states favor one type over another tax wise so it Is an important decision. Also, in making the decision, are you going to be making a Profit in the first 2-3 years or not? That helps determine type also.
Some states like TN allow a single person LLC which in TN is much more favorable than a S-Corp tax wise.
Very important to set it up correctly BEFORE you start your business.
Free Legal advice is worth what you pay for it.
I wouldn't just check with my CPA, but I'd also check with a good business attorney.
I've had all three over the years in different states. I've found that some states favor one type over another tax wise so it Is an important decision. Also, in making the decision, are you going to be making a Profit in the first 2-3 years or not? That helps determine type also.
Some states like TN allow a single person LLC which in TN is much more favorable than a S-Corp tax wise.
Very important to set it up correctly BEFORE you start your business.
- 1,641
I must disagree. S-corp is a taxation status granted by the IRS, not the state. The state will let you register an llc, or a corporation, but not an s-corp. Both the llc and the corporation can elect s-corp status with the IRS.
- 882
I'm not a CPA or Attorney. I understand the "election" thing, but I set up a single member LLC in TN for my insurance agency because per my attorney & CPA there were advantages in TN to do so. That was the First time in three states that I hadn't set up an S-corp instead.
Thus my comment: Free legal advice is worth what you pay for it
I agree! However, sometimes the paid legal advice isn't much better. I still think that a good CPA will better understand this one than most attorneys.I'm not a CPA or Attorney. I understand the "election" thing, but I set up a single member LLC in TN for my insurance agency because per my attorney & CPA there were advantages in TN to do so. That was the First time in three states that I hadn't set up an S-corp instead.
Thus my comment: Free legal advice is worth what you pay for it
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- 1,641
It sounds like you took the advice without fully understanding the subject. It happens all the time.
I stand by my earlier statements.
My apologies to Padthai on this one.
- 882
It sounds like you took the advice without fully understanding the subject. It happens all the time.
I stand by my earlier statements.
Well, I understood the subject as fully as my CPA & Attorney explained it. [plus I have a degree in finance, owned just a few different types of businesses over the years] It worked quite well from a tax & liability standpoint for me vs. a Sub-S. Again, the only reason for the sole-proprietor LLC in TN was for me to pay less taxes to the state of TN. Didn't do a whole lot regarding Fed Taxes.
But your mileage may differ depending on what state you are in AND whether you are making a good profit each year vs. losses. I now have 2 LLC's & a C corp. Again, all about timing of income & state/fed taxes. If one doesn't make much of a profit, it probably doesn't matter much which corp type they choose
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