By Jason Watson (Google+)
Posted December 23, 2017
Here is a quick recap or summary of S Corps, and why you might consider making the election-
- Must have an LLC, partnership or C Corp in place
- Can save 8% - 10% of net income on taxes, possibly more
- Must run payroll and prepare a corporate tax return, no exceptions
- Payroll ran quarterly, previous distributions can be reclassified as wages (elegance!)
- Pull money out with reimbursements for business expenses (home office, mileage, etc.)
- Hefty retirement contributions allowed, reduces income
- Health insurance premiums and HSA contributions get dollar for dollar deduction
- Pay for your children’s college expenses through the S Corp
- Can retroactively make the S-Corp election back to Jan 1 2017
- Approximately $2,940 modeling and consultation.
Attention! Sales pitch coming- S Corps are easy, they typically make sense if you are above $35,000 in net income after expenses, and they will improve your financial position in life. Contact us to get started. Did that sound too cheesy? Seriously the right questions must be asked and answered since not all S corporations make sense.
Taxpayer's Comprehensive Guide to LLCs and S Corps
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