by topstar » Fri Oct 16, 2009 12:38 am
New here. Been thinking about forming an S corp or LLC mainly for saving on self employment taxes. Would like to know if an S corp or LLC helps. Glad to get to know the site.
Mike from Los Angeles
Mike from Los Angeles
Posted: Fri Oct 16, 2009 08:48 am Post Subject:
Well Mike,
I am not a tax consultant but I do know that in CA there is an $800 min tax on an LLC.....so even if you don't make a penny the state will charge you $800. If your already paying more then $800 in taxes its a moot point.
Hope that helps....
Posted: Fri Oct 16, 2009 06:33 pm Post Subject:
It's my understanding that an S corp will be more helpful than an LLC, but you should prob talk with an accountant.
Posted: Fri Oct 16, 2009 06:51 pm Post Subject:
I'm not an accountant, but can share my personal experience.
For my agencies, I filed the S Corp status because that entitled the income or loss to "flow" to my personal tax return. When I incurred a loss, the loss was deducted directly from my personal income, therefore, my tax liability was reduced. As I consistently reinvested in the agencies (new equipment, additional locations, etc) I incurred a loss most years.
Do note: a loss for the corporation didn't mean I as the President didn't profit from the business each year.
Now with regards to franchise taxes, that was dependent upon state regulation.
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