Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

Would an S-corp or LLC be more beneficially in regards to…

Would an S-corp or LLC...
Would an S-corp or LLC be more beneficially in regards ***** ***** for my situation?
Show More
Show Less
Ask Your Own Tax Question
Answered in 2 minutes by:
3/20/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,383
Experience: Taxes, Immigration, Labor Relations
Verified

I will help you with determination,

but please tell me about your current situation....

Ask Your Own Tax Question
Customer reply replied 5 months ago
I recently sat down with a business lawyer to discuss my situation, and we came to the determination that a C-corp would not be beneficial for my tax situation due to the net profit I expect, versus what I would have to pay at the corporate tax level. I dabbled with the idea of a C-corp classification, to avoid net profits that I plan on keeping within my business, to be used for my child support calculation. I plan on maintaining my w2 employment job which I gross approximately 75k per year, and I do not plan on taking a salary, or any net profits for personal use, since I have my w2 position to keep me afloat.I can conservatively expect to net 30-40k my first year with the company. I was advised by the business lawyer that by filing as an S-corp, due to new laws in place, my business would have the first 20% tax free. Is this true, and is there any recommendation based of my personal situation to help determine which choice would be better for whether it be LLC, LLC taxed as an S-corp, or just filing as an S-corp. Also, my business would be in sales/marketing within the medical field, basically obtaining patient referrals for medical devices, and forwarding the business to a corporate office for them to carry out the order. I do not plan on having any employees, but may pay independent contractors marketing/finder fees for business acquired.Thanks

We need to look for optimal solution based on all factors.

Form tax prospective - may be S-corportaion is better option,

but when you bring other issues - such as child support , etc - and want to shield some income - that is a different issues - and depending how important that will be for you - you might want choose that option even you might have larger tax liability.

So - if we strictly look from tax prospective - I woudl agree with your S-corporation choice.

The new tax law reduced corporate tax rates - so in order to pass that reduction to small businesses that rare use C-corporation status - the Congress came up with 20% business deduction for all small businesses that pass income to owners.

With S-corportaion - you will be required to pay yourself reasonable wages - thus - you will need to set a payroll - so you will have another W2.

The rest of income will be passed to you on K1 - and will be only subject to income tax.

Let me know if you need any clarification or details.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,383
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,383
33,383 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
This question is regarding an S-Corp owning a single member
This question is regarding an S-Corp owning a single member LLC. If a taxpayer has an LLC (single member LLC taxed as an S-Corp, herein "S-Corp) and also has another LLC (disregarded entity, herein "D… read more
Lev
Lev
Tax Advisor
Bachelor's Degree Equivalent
33,383 satisfied customers
I'm forming a new company and looking for advice regarding
I'm forming a new company and looking for advice regarding what would be more beneficial for my Tax status, S-corp or other, and why? (Single Member LLC)… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
171 satisfied customers
My business partner and I are forming 5 companies. We will
My business partner and I are forming 5 companies. We will be 50/50 owners of four of them and own 66% of the 5th (the remainder will be owned my another individual). All companies will be based in Wy… read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,693 satisfied customers
Is this free? Are they us attorneys / cpa? I know assistance
i know assistance with s-corps owning other s-corps and llcs. and i need information in regards ***** ***** corp owning other s corps and llcs in florida and in georgia … read more
Matthew Breecher
Matthew Breecher
President
MBA (Graduate Legal Studies)
286 satisfied customers
I am an employee of an LLC that is primarily owned by an S.
I am an employee of an LLC that is primarily owned by an S. Corp. I am also a shareholder/member of both the LLC and the S. Corp. There are multiple shareholders/members in both the LLC and S. Corp. C… read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
Real Estate Broker, who is the one of the owner the real estate
Real Estate Broker, who is the one of the owner the real estate company (s-corp):where should to include a broker license expenses: in the personal income tax return Sch C or in the s corp income tax … read more
Mark Anderson
Mark Anderson
Attorney
Doctoral Degree
10 satisfied customers
I have a client that is a sole proprietor of her business.
Hello, I have a client that is a sole proprietor of her business. She is also the manufacturer/labor as she is the only person building products for sale, but she is unable to pay herself at this time… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
As a small business owner as classified as a LLP in the state
As a small business owner as classified as a LLP in the state of ND, how does a person file on their federal taxes. As a sole proprieter or S Corp? Which is more beneficial?… read more
Megan C
Megan C
Certified Public Accountant (CPA)
Master's Degree
8,655 satisfied customers
If we set up a DBT what are the roles of the participants?
If we set up a DBT what are the roles of the participants? My husband and I both have investment in the property. Can we both be beneficiaries or is one the beneficiare and one the adminstrator? What … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
A taxpayer will have 600,000 of taxable income in 2013. Included
A taxpayer will have 600,000 of taxable income in 2013. Included in the 600,000 is a large capital gain of 500,000 & the remaining income is ordinary. Are the ordinary income & capital gain taxed diff… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
Another question. I have a foreign investor in a C Corp.
Another question. I have a foreign investor in a C Corp. No problem there. But, we also want to allow him to participate in an LLC or a Sub-S corp. Now, we can't have a foreign investor in a S-Corp, B… read more
fastfile
fastfile
Tax Advisor
Master's Degree
550 satisfied customers
I work as a full time employee of a software consulting company
I work as a full time employee of a software consulting company (company located in CA ) at their client site location (Project location of client in MN) . My gross annual salary with my employer comp… read more
USTaxAdvising
USTaxAdvising
Partner
Bachelor's Degree
609 satisfied customers
How are US royalties of a purchased (or paid for in a work
How are US royalties of a purchased (or paid for in a work for hire agreement) intellectual property (ebook)/copyright taxed? Can the copyright/intellectual property be depreciated for tax puposes? Wh… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
Taxpayer has an existing LLC incorporated and operating in
Taxpayer has an existing LLC incorporated and operating in Washington State. Taxpayer wants to create a new Sub S (or C Corp) in California to handle California clients. The new corp will receive all … read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I have a couple of questions about LLC (1) Husband & wife
I have a couple of questions about LLC: (1) Husband & wife currently own and operate a restaurant (20-25 employees) as a sole proprietorship. Due to an influx of people moving into the area, their bus… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,512 satisfied customers
I am about to purchase a used vehicle that I want to pay cash
I am about to purchase a used vehicle that I want to pay cash for. I have a small remodeling business set up as an S-Corp, as well as an Equine horsemanship business, that I am about to set up as an L… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
What is more beneficial to active members of a profitable LLC,
What is more beneficial to active members of a profitable LLC, to pay themselves salaries and file as an S Corp or guaranteed payments and file 1065? If they are not salaried is it more difficult to g… read more
Mark D
Mark D
Enrolled Agent
Master's Degree
1,338 satisfied customers
I HAVE 2 CLIENTS ONE HAS 3 4 FAMILY RENTAL PROPERTIES IN ...
I HAVE 2 CLIENTS ONE HAS 3 4 FAMILY RENTAL PROPERTIES IN HIS NAME AND THE OTHER HAS ONE 2 FAMILY RENTAL 1/2 HE LIVES IN AND BOTH SCHEDULE E LOSSES ARE GREATER THEN THE ALLOWABLE $25,000.00. MY QUESTIO… read more
Mark D
Mark D
Enrolled Agent
Master's Degree
1,338 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x