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Can you provide details on how to set up an s corp? I have…

Can you provide details on...
Can you provide details on how to set up an s corp? I have an llc is it easier to convert that or start from scratch on the s corp? Is there any downside to having an s corp verses an llc?
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Answered in 20 minutes by:
3/10/2018
ABC Accounting Group
ABC Accounting Group, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 889
Experience: Business Consultant/Accounting Manager
Verified

Hi. Great Question. In an S-Corp, you have to pay yourself a reasonable salary and it requires an 1120S form, an extra form at year-end.

For taxes, to elect for S-Corp treatment, file Form 2553. You can make this election at the same time you file your taxes by filing Form 1120S, attaching Form 2533 and submitting along with your personal tax return. Here is a link to the form - https://www.irs.gov/pub/irs-pdf/f2553.pdf

For S-Corp, you will need an articles of Incorporation, to be filed in the state in which you wish to form. If you conduct business nationally, you may want to choose to incorporate in a business-friendly state such as Delaware, and register to do business in additional states as needed.

Now and then, hold a meeting and take notes on the meeting, to discuss the corporation.

Here is Ohio filing - https://www.sos.state.oh.us/businesses/filing-forms--fee-schedule/#gref

It is some paperwork (non-tax paperwork) to start it, but it is tax-savvy to have it.

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Customer reply replied 4 months ago
I have to pay myself a salary which is taxed at my personal tax rate and then anything I pull out of the company after that would be taxed at the corporate rate 21% less the 20% deduction? Would a regular llc have the entire amount taxed at 21%? Also if I left the money in the business for an s corp would it be taxed or is it only taxed when I pull it out and pay it to myself?
Taxes when you pay yourself. But it is an expense on your 1065.
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An S Corp is not taxed at the 20 percent rate. The net income flows through to your personal return.
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Sorry. An expense on your 1120S
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Customer reply replied 4 months ago
Are there any ways to set up a corporation so that I get taxed at the 21% rate? Also can a business donate money like an individual can and deduct it from income before the income gets passed through to the owner

Hi. The only way would be through a C-Corporation. You would fill out an 1120. You will also need to issue shares, etc. There are a lot more statutes.

ABC Accounting Group
ABC Accounting Group, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 889
Experience: Business Consultant/Accounting Manager
Verified
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