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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29965
Experience:  Taxes, Immigration, Labor Relations
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Im starting a business with 4 partners. How do we decide to

Customer Question

Im starting a business with 4 partners. How do we decide to be taxed as an s corp or partnership? We are in LLC, if that is relevant.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

That is not relevant for income tax purposes - but do relevant for employment or self-employment tax purposes.

Expert:  Lev replied 1 year ago.

In simple words - if net income generated by the LLC is relatively small - keep it as a partnership.

Also - if you are not sure at the starting point - keep it as a partnership.

But if the LLC produces substantial income - you might want to elect S-corporation tax treatment - that will add overhead - but allows some saving on employment taxes.

Let me know if you need any help with reporting.


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