Todd Payne
Expert
- 77
S corp, and a good CPA. Can't imagine trying to do the taxes myself for the corp. Money well spent if you ask me.
S or LLC Corporation?
- Thread starter HuntAssuranceGroup
- Start date
- 882
Todd, I'm with you for a small business in CA. That is what I had there & in KY. But I'll say it again. There might be a better option, depending on which state you live in.
More than one CPA/Attorney in TN have told me the same thing. I save $$ by being an LLC in TN vs a S-corp
- 1,641
Bob,
Now you're just spreading misinformation. Let's break it down.
The state will let you register an llc, an llp or a c-corporation. Regardless of where you register your business, the state has no say over Federal tax schemes. You CANNOT register an S-Corp election with the state.
If Tennessee has a tax advantage for llc's that is not available for sole proprietors or corporations, that is for state tax only. It has nothing to do with Federal taxes.
You have a Tennessee single member llc. If you desire, you can have your llc opt for s-corp tax status with the IRS. You are not lowering your Federal tax bill by having a TN llc. The IRS views all profits from a single-member llc as income subject to employment taxes. The only way for an llc to get around this is to notify the IRS that you want s-corp status.
Remember, the state regulates the business structure. The IRS regulates Federal taxes.
Your TN llc will not improve your Federal tax obligation just because your llc was issued by TN. It can only help with state taxes.
If your CPA insists that you save money by being a single-member llc in TN vs a S-corp, then you need to him to tell you how. I guarantee you it's not lowering your IRS bill. If he says otherwise, you need to find a new CPA because he's running a scheme that might result in jail time.
Now you're just spreading misinformation. Let's break it down.
The state will let you register an llc, an llp or a c-corporation. Regardless of where you register your business, the state has no say over Federal tax schemes. You CANNOT register an S-Corp election with the state.
If Tennessee has a tax advantage for llc's that is not available for sole proprietors or corporations, that is for state tax only. It has nothing to do with Federal taxes.
You have a Tennessee single member llc. If you desire, you can have your llc opt for s-corp tax status with the IRS. You are not lowering your Federal tax bill by having a TN llc. The IRS views all profits from a single-member llc as income subject to employment taxes. The only way for an llc to get around this is to notify the IRS that you want s-corp status.
Remember, the state regulates the business structure. The IRS regulates Federal taxes.
Your TN llc will not improve your Federal tax obligation just because your llc was issued by TN. It can only help with state taxes.
If your CPA insists that you save money by being a single-member llc in TN vs a S-corp, then you need to him to tell you how. I guarantee you it's not lowering your IRS bill. If he says otherwise, you need to find a new CPA because he's running a scheme that might result in jail time.
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- 15,041
You ever consider, he's referring to state taxes and not federal taxes?
- 882
VolAgent. You WIN!
Yes, that is what I've been saying since my first post! It depends on what STATE you live in which form of Corp would be Best for you!
I Agree, Federal Taxes are Federal and wouldn't matter what state one lives in. But TN laws favor the LLC over the S-corp for STATE tax reasons. Yes, it is also true & I understand that "S-corp" is an election one can do under an LLC or Corp. TN has something called the "HALL" tax that bites you for the S-corp election tax wise. So until I was making "good" money, it was best not to take the S-corp election. At least that is how I remember it. Sold my agency in '06 so things may have changed since then?
I did say that I had an S-corp in CA & KY but TN is the Volunteer State & they do things differently!
Glad VolAgent understood. Next time I'll try to leave my Southern Drawl/Slang out of my posts!
Yes, that is what I've been saying since my first post! It depends on what STATE you live in which form of Corp would be Best for you!
I Agree, Federal Taxes are Federal and wouldn't matter what state one lives in. But TN laws favor the LLC over the S-corp for STATE tax reasons. Yes, it is also true & I understand that "S-corp" is an election one can do under an LLC or Corp. TN has something called the "HALL" tax that bites you for the S-corp election tax wise. So until I was making "good" money, it was best not to take the S-corp election. At least that is how I remember it. Sold my agency in '06 so things may have changed since then?
I did say that I had an S-corp in CA & KY but TN is the Volunteer State & they do things differently!
Glad VolAgent understood. Next time I'll try to leave my Southern Drawl/Slang out of my posts!
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- 1,641
This is what precluded me from making that leap:
- 1,473
Bob ur trying to be an expert on everything. Stick to net leads. Not sure who ur trying to impress!
- 882
Yep,
Beating a dead horse. Like I said: get a CPA/Lawyer to help you make the decision. "Free legal advice is worth what you pay for it"
mikerichman
New Member
- 9
Whatever you do, don't hire and consult with a business and tax professional who has experience in these types of matters.
Instead take a vote on this public forum and see what they say and use that information to make critical decisions on your business structure, formation, legal, and tax issues.
In all his glory...
Instead take a vote on this public forum and see what they say and use that information to make critical decisions on your business structure, formation, legal, and tax issues.
In all his glory...
- 7,790
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