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Im starting a business with 4 partners. How do we decide to…

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Im starting a business with...
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: 2 years ago.Category: Tax
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2/11/2016
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,859
Experience: Taxes, Immigration, Labor Relations
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That is not relevant for income tax purposes - but do relevant for employment or self-employment tax purposes.

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Tax Professional: Lev, Tax Advisor replied 2 years 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.

Otherwise,

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