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DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 784
Experience:  Years of Experience in Business & Personal Taxes
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I am purchasing a convenience store and gas station. I want

Customer Question

I am purchasing a convenience store and gas station. I want to pay myself on payroll and take out taxes so I can get a W2 at the end of the year. I will also have 2 employees on payroll. Should I set up the business as a corporation or LLC. I would prefer to set it up as an LLC but I want to pay myself on the payroll.
Submitted: 3 months ago.
Category: Tax
Expert:  DanielleCPA replied 3 months ago.

Welcome and thank you for your question. I am a CPA and am here to help you with your tax question. Please give me a few moments as I type out your answer.

Customer: replied 3 months ago.
Please send me the response
Expert:  DanielleCPA replied 3 months ago.

As you may be aware, the default tax treatment of a single member LLC owned by an individual is as a sole proprietorship. The advantage to this is flexibility but it is typically not tax advantageous. In your particular case, you can't pay yourself with a W2 if the LLC is treated as a sole proprietorship.

If you want your business to be organized as an LLC for legal purposes, but would like to be treated as a corporation for tax purposes, you can file a Form 8832 to be treated as a corporation. This would allow you to pay yourself with a W2. You may also want to file a Form 2553 (in addition to the 8832) to have the business treated as a S Corporation for tax purposes.

Expert:  DanielleCPA replied 3 months ago.

Hello, I just wanted to check in with you to see if there is anything else I can help you with? I am glad to help if you need clarification or have any follow-up questions.

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