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You can elect S Corp status for your LLC.
If the corporation wants to be treated as an S Corp for the current taxable year,than it must make its S election within the first two and one-half months of thecorporation s taxable year, or, at any time during the preceding taxable year.If the S election is made after the first two and one-half months of a corporation staxable year, then that corporation will not be treated as an S corporation untilthe next taxable year.
So you cannot file for S election for the year 2010 but you can file the election for the tax year beginning 2011 by filing FOrm 2553
Yes, you will run the payroll for you in a similar way as you do it for your other employee(secretary)
Considering the hours you work and your experience and qualification, you need to take reasonable compensation.
Filing form 2553 will do it without any other action with the State of Texas?
What can I do to minimize tax liability this year given that I cannot file for S election? Should I still withhold, or am I totally stuck paying same self employment and profit on the corp?
You can file for S election requesting relief under Rev Proc 2004-48 by filing Form 2553 and a reasonable cause for late filing. It is quite possible that you can have the S election in effect for the current year if the IRS accepts it.
YOu do not have to take with State of Texas.
Great answers. Last question: Do you have a link to any information that would help me reduce tax liability if they don't accept? Thank you for your thorough answers.
If they do not accept the election than you will be filing as a sole proprietor on Sch C and will pay self employment tax on the net income.
Few suggestions to reduce your income would be to
if you are a cash basis tax payer- defer some of the receipts or pay off the expenses before the end of the year
buy assets/equipments that you need for business and write off under section 179 expense
claim business related miles driven at standard mileage rate
If you are carrying on this business from home than claim some of the related home office business expenses
Link to the Rev Ruling for late election
Exactly what I thought. THANK YOU for your great answers. You are a real pro. I'll ask you again. Walker Price