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Im getting ready to create a business that will be a

Customer Question
Im getting ready to...

Im getting ready to create a business that will be a automotive and freight transportation company which is better LLC or S Corp?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

We im going to be opening a veteran small business moving cars from auctions to there purchasing dealers lot as well as moving freight through several load sites and im just wondering if S Corp would be better or LLC

Accountant's Assistant: Is there anything else the Accountant should be aware of?

Im going to be trying to do this off of a SBA loan through a veteran agency

Submitted: 8 months ago.Category: Finance
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Answered in 9 minutes by:
9/29/2017
Financial Professional: Lev, Tax Preparer replied 8 months ago
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 32,954
Experience: Personal Investment, Tax Preparation
Verified

When you just want to start the business and not sure whether it will be successful or not - it mighty be better to start as a solo proprietor.

As a general rule - you want to keep your business structure as simpler as possible and avoid any unnecessary overhead...

If you are sure that your business will be successful and/or want some protection for you personally or there are other reasons - you may create a separate business structure - the LLC - which will be taxed as disregarded entity on your individual tax return - as if there were not any LLC. But still for all other purposes - the LLC will be a separate entity - it may own assets, hire employees, etc.
When you business operation will take over - and you could predict net income about $40-$50k - at that time - I suggest to make S-corporation election - and that will potentially provide you with some tax saving.

That is my general view on your situation based on limited information.

Please elaborate as needed.

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Customer reply replied 8 months ago
ok. are all startup expenses write offs?
Financial Professional: Lev, Tax Preparer replied 8 months ago

You will have an option to deduct some in the first year OR to amortize over 15 years.
These are referred as "business start-up and organizational costs" - and are generally capital expenditures.

However, you can elect to deduct up to $5,000 of business start-up and $5,000 of organizational costs in the year the business actually starts.

The $5,000 deduction is reduced by the amount your total start-up or organizational costs exceed $50,000.

Any remaining costs must be amortized.

Let me know what your start-up and organizational costs might be?

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Financial Professional: Lev, Tax Preparer replied 8 months ago

I appreciate if you take a moment to rate the answer.

Experts are ONLY credited when answers are rated positively.

If you still have any doubts, need clarification - please be sure to ask.
I am here to help you with all Social Security / Tax related issues.

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Lev
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