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TexLaw
TexLaw, Attorney
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My goal is to have or file taxes as an S- Corp. As doctor

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My goal is to have or file taxes as an S- Corp. As doctor of chiropractic licensed and practicing in the State of New York, I was told that I must form a PC (profess. corp), rather than forming a C-corp and converting it to an S-Corp. Can you confirm.

Hi,

My name is XXXXX XXXXX I will be assisting you with your legal question.

New York law does not require that a licensed chiropractor incorporate as a professional corporation. It only permits it and gives you the advantage of limiting the type of individuals who can be owners of the company (i.e., only licensed chiropractors) and also allows you to treat the malpractice liability of any doctor you employee as separate from the company. The following is a site with information regarding the tax advantages of forming a PC: http://www.amerilawyer.com/pdf/182.pdf

You are free to incorporate as a C-Corp and elect subchapter S tax status if you choose.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am credited by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Kind regards,
Zachary
TexLaw and 2 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.

1. Are the tax benefits the same as an S-corp or are there additional benefits from a tax standpoint with a PC over an S- Corp?


 


2. Like a C corp, does the PC have to declare itself an S-corp for tax purposes? ... and are there other options at tax time? I will be a single share holder / owner.


 


3. The link you sent me to says that health insurance premiums are fully deductible for employees. I believe that I would be an employee of the corp, therefore my own health ins premiums would be deductible? for PC and/or S-corp?


 


4. Likewise, it said that life ins premiums may be deductible. I have a whole life policy, would the premiums be deductible? ...for PC and/or S corp?


 


5. With the whole life policy, does it depend on who is the beneficiary or the owner of the policy for its premiums to be deductible?


 


6. With an S-corp, the shareholder may take 60% income from corp as an employee with FICA?FUTA tax, and 40% as dividends which are not subject to FICA/FUTA. Is this the same for PC?


 


 

1. Are the tax benefits the same as an S-corp or are there additional benefits from a tax standpoint with a PC over an S- Corp?

A: Depending on how you set up your accounting and are paying yourself and your employees, yes there are, but these issues should be addressed by your tax consultant for greater detail given the individual circumstances of your business.

2. Like a C corp, does the PC have to declare itself an S-corp for tax purposes? ... and are there other options at tax time? I will be a single share holder / owner.


A: Yes, you do have to declare subchapter S treatment. As for other options at tax time, your tax consultant will have a better understanding of what options are available to you given your individual circumstances.

3. The link you sent me to says that health insurance premiums are fully deductible for employees. I believe that I would be an employee of the corp, therefore my own health ins premiums would be deductible? for PC and/or S-corp?

A: Yes, if the business is paying for those.

4. Likewise, it said that life ins premiums may be deductible. I have a whole life policy, would the premiums be deductible? ...for PC and/or S corp?

A: Yes, if the business is paying for them. However, there may be some limits on this depending on how it is structured by your tax consultant.

5. With the whole life policy, does it depend on who is the beneficiary or the owner of the policy for its premiums to be deductible?

A: I'm not sure on this one.

6. With an S-corp, the shareholder may take 60% income from corp as an employee with FICA?FUTA tax, and 40% as dividends which are not subject to FICA/FUTA. Is this the same for PC?

A: If you elect subchapter S treatment for the PC, yes.
TexLaw and 2 other Business Law Specialists are ready to help you