Thank you for your question and for asking for me. I look forward to working with you to provide you the information you are seeking.
The S Corp is really the older version of the more modern LLC. The rules and laws for both are essentially identical. The LLC can actually elect to be taxed as a corporation
, which would give you the same tax scheme as the S Corp for the LLC. Members of an LLC or S Corp could actually receive unemployment benefits if they can prove to the unemployment commission that the reason they are out of work is truly from reasons that are not the fault of the members of the LLC or S-Corp, it is just more work to show that the reason you are not employed and making money is because you have not been able despite due diligence to get work. For unemployment, the benefits are based only on the wages you make from the company, not on profit sharing, so you have to take wages for working from the LLC or S-Corp.
Salaries would have to have social security taxes paid, but profits from the company would not have social security paid. Many people with an LLC or an S-corp would take a salary that would entitle them to the maximum unemployment benefit and then would take the remainder in profits to avoid the additional social security taxes.
Instead of a CPA, you really need to sit with a local business law attorney to examine your business structure to decide perhaps if just taxing your LLC like a corporation would be better than switching to the S-corp, which does not get you much more in any other benefits than the S Corp legally, as I said they are about the same thing for the most part.
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