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Thank you for your answer. Our understanding of the LLC is that we are not allowed to have "wages" only guaranteed payments. As such these are not wages and need to have self employment tax paid on them fully by the individual. In the S Corp you can become an employee and this changes to the business paying half of the Social Security. Is this not true? Can the LLC set itself up in a manner that the owner/member can become an employee of the business?
IN so far as the unemployment. Our business operates about 7-8 months a year. The remainder there is so little possibility of work (we build kit homes and folks are just not building in the winter months) that we shut down for these months other than fielding calls on potential customers. DO you think this is acceptable as "no fault of the owners" and would make us "employees" eligible for benefits?
Thank you once again.
You mention that we should seek to tax ourselves (under the LLC) like a corporation. Would you please explain this further? How does a corporation tax itself differently? Presently we pay no tax for the business whatsoever.
Presently with our "guaranteed" payments we pay them out like they are wages, every two weeks. IN actuality the are compensation for actual hours spent working. With a salary, isn't this a base pay with out variation or can we do basically the same and pay a bi-monthly "draw" on the "salary" which in reality would be based on hours worked in that time period?
I have been conversing with a CPA at the same time I have been with you. IN regards XXXXX XXXXX form 8832 you recommended, they said the real form we need to use is 2553 in order to use corporate tax structure for out LLC. Are they missing something or are these two basically the same? Could you help clarify this? From what I have read form 8832 is to from a C Corp.
Thank you for your response.This is the problem sometimes with CPA's. Please click on the link above that says Form 8823, that is the IRS website and it specifically tells you step by step what to do and the IRS tells you to file the 8823 as an LLC to be taxed as a corporation. The Form 2553 is not for that and I think you may have misunderstood what the CPA stated. Look at the link I provided to the IRS where I typed in previous response to you Form 8823 and you will see that it is the form to choose to have your LLC taxed like a Corporation, the form 2553 is for an S-corp conversion.
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