LLC vs S-corp! | Why You Need To Know This!
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- Опубліковано 20 тра 2024
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00:00 Intro
01:07 Topic Overview
02:54 LLC: Best Starter
03:34 S-Corp: Saves Taxes
04:28 LLC: Convert to S-Corp
04:53 LLC and S-Corp: Middle Ground
07:54 S-Corp: Require Paperworks
08:13 LLC: Audit Risk
08:50 LLC: Two-member LLC
11:18 S-Corp: Minutes Paperwork
13:52 LLC and S-Corp: Set Up
15:02 S-Corp and LLC: Partnership Flaws
16:32 S-Corp and LLC: Work Together
17:26 LLC: Name Does Not Change
18:43 S-Corp: Self-Employment and Solo 401K
21:31 S-Corp and LLC Tag Team Against C-Corp
22:48 Dynamic of S-Corp, LLC, and C-Corp
25:37 Main Take-Away
27:05 Last Words
29:28 Outro
I've started a snowcone and Smoothie business in Philadelphia since 2018 and finally about to formed my first LLC. As a small business owner you don't always makes profits your first few years and it true. It take time to built your brand like Adidas and Nike guys. Self Motivation and dedication will take you a long way in life (in general).
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Loved this format!!!!
I always asked my professors I'm business school for these details between entities. They had nothing other than corps get double taxed, do an llc. Your info is rad. Cheers.
You guys are great! Thank you for the education. 😊
Love the action packed, pull no punches format!!
Side note for the editor. There is 16 minutes of dead space after the episode. I almost didn’t watch because I didn’t have 45 minutes available. After discovering that it was only truly 30 minutes I watched and glad I did.
Great video on why business owners should consider starting off sooner than later as a single-member LLC disregarded and later making the S election if necessary for the current year to save on SE taxes. Plus, the LLC formation is a better marketing message and will start you down the path to separate your personal and business credit.
Great format!
I loved this and I could follow every sing word loll Thank you so much
That joke about "9 out of 10 accountants ask you to do minutes and the 10th one is a moron" is the first joke I've really laughed at. Good call.
You gentlemen are awesome
I made a huge mistake of not keeping track of all the work and expenses I did for the 2 years leading up to signing a lease for my first business. Tons of travel expenses, home office expenses, equipment expenses, meeting expenses, etc. I should have started by watching videos like yours or taking a basic class on this stuff, but instead it cost me over 50k in mistakes. After 7 years in business, we are finally converting to an S Corp.
Solo 401K?? What about a whole-life insurance policy with an infinite banking concept, aka, private banking??
Thanks!
ALWAYS do your annual meetings/minutes! This is the #1 way to really get yourself screwed: no minutes will get your head removed by the IRS when they get around to you!
What about a Canadian who invests in U.S. real estate? LLCs don't work for us (I believe). What entity or entities do we need?
What do you guys means by doing minutes on my LLC annually???
Excellent as always !! Love your videos and attitude!
I started my LLC 2 yrs ago; 1st yr we made $50k, last yr we made $200k and it looks like we owe a *****load of taxes !! Can we save that ? Can we switch to S-Corp to save last yrs taxes or even if we change now, last yrs’ taxes will be treated as an LLC?
Only a natural persons can hold shares in an S-Corp. LLC membership can be with a corporation. This could potentially reduce the K-1s to your personal returns, which might apply if you are a real estate investor that uses loans.
Do you recommend a c-corp for owner/operator truck driver??
You said that you don’t have to have a llc or s corp to start business and that you do sole proprietorship. I am independent contractor with multilevel marketing company and have bought digital software assets where I earn crypto rewards daily. How can I get tax deductions on the nodes I bought? Do I need llc or what type business do I need?
So I farm, net for 23 will be 6 figures. Also have a rental house. What's the best way to set it up so I'm saving on taxes yet everything is protected? Should my S corp rent the ground from the LLC for farming?
Excellent information you can both earn $500.00 along with a viewer in April per Schedule A to Z Interdiction Trust, with Schedule F for pink slip defense and Schedule L for LLC and life Insurance defense.
Love these guys
In a partnership LLC can only one member receive profits through an s-corp?
Thank you for the information where to file interest, dividend, 1099B win and loss trade in the LLC sole proprietorship schedule C?
To get your question answered, please submit it to podcast.mainstreetbusiness.com/ - thank you!
Series llc?
In which states do these guys offer services?
much better
Mark..Iam in Austin Texas...whi can i call to see.about your services here in Austin Texas...
👍
Rca 643 private trust has you do a video on this? Or could you get an active cpa or active attorney contact me about this topic?
Great fight!!! Plenty of aha moments! Will definitely get a consult soon!
What are "minutes"?
Double speak by William Lutz's
How do I contact you ? I just helped my son start an S corp, and I plan to start a new non profit political group soon. I saw your video on annual reporting that you do, and may need your accounting service. If you are licensed attorney in Texas, may need you here also.
Great video. What are the best way for couple in S Corp? Co owner or espouse as employee. Thanks
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Husband and wife or spouses count as just 1 member for an LLC.
The best reason to use an S corporation is that rental losses become a Net Operating Loss which can't reduce your tax liability to Zero even if the Net Operating Loss reduces your personal taxable Income to Zero , the Net Operating Loss will automatically generate an Alternative minimum Tax and the Net Operating Loss has no benefit to offset against any other positive income that you report on your 1040 tax return.
The s corporation allows 100 % of the net operating loss to reduce your taxes to zero
The LLC loses the tax benefits of the Net Operating Loss generated by your business when it is reported on your 1040.
The S Corporation maintains the character of the losses generated by your business as ordinary income losses and not as a Net Operating Loss and the losses can be used to reduce your taxable income to Zero or a Loss that can be carried over to future years only using an S corporation.
On top of being able to save as an estimate $ 15,000 per year on social security tax depending on the business net income.
In addition , if an LLC has unpaid payroll taxes the owner of the LLC is personally liable for 100% of the unpaid payroll taxes where as under the S Corporation the owner is only like for 50% of unpaid payroll taxes.
You also lose being able to max out on contributions for you and your spouse in a Solo K retirement plan using an LLC which you get automatically in an S Corporation by paying yourselves Wages on a W-2 .
You lose all of these tax benefits from the start by organizing your business as an LLC because it is impossible to achieve under an LLC for any business .
Never use an LLC for your Business it is only to be used as a special purpose entity created just to complete a single transaction venture and then terminate.
It is the worse entity to use for any operating business.
What are the thoughts on LLC SEP-IRA vs S-Corp Solo 401K? Max $61k contribution with SEP-IRFA vs $22.5k on Solo 401K? Is that not a substantial difference?
Solo Roth 401k ... you can also have a Roth/IRA too. I don't think you can do a 401k and a SEP-IRA but there is the back door Roth. Remember the only reason to put money into a traditional retirement account is for Tax deferral. Roth gives us Tax Savings in Retirement if we plan on being in a Higher Tax bracket. 🤑😉🙏🏼
S corp entity can also contribute as employer max in 60s not 22k
What's the best antity for a trucking over the road or a long halls interstate ? Thank you in advanced.
they won't answer unless you ask them live. It's really about what they say, how much are you going to make? As you get over $50 in profits (not income but profits), you want to be an S Corp at that point. I would worry most about legal protection, due to safety issues, so make sure you keep bank & credit card accounts seperate (don't commingle funds), do the yearly minutes, everything you can to say, "this is my business and not myself doing business as myself". one thing, you're in the right business these days, good call!
I did an S corp for my trucking company and am everything, president, vice president, director, treasurer and in 7 years never had to do/report minutes. If you bring a driver under your authority, make sure it's an OO and have him set up an S corp to not be liable for his accidents and he pays for his insurance, IFTA (in his home state) maintenance, fuel everything. Just charge him 10-15% of his gross to drive under your authority. Provide him with a load board and pay for any permits for KY,NY,WY but he pays for miles driven in those states. You pay for name signs on side of his truck with your dot# etc., all small expenses. My annual overhead went from $98k down to $2k and I sold my truck at Ritchie Bros. . Sold sweet dry van to him and lived off his 10% gross revenue into social security. Now shut down business and froze authority incase I sell it. in the years with him he did dry van, traded the dry van for a car hauler and then he found a cheap/decent reefer.
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A single member or married couple owned LLC is only a Schedule C but with all the unnecessary Attorney fees that these two attorneys charge you plus the required State fees Just so they can charge you their fees again to convert your LLC to a Partnership or an S -corporation
TOTALLY!!!
Please stop the s corp vs. LLC. As you know LLC can choose s corp tax status. Compare LLC vs corporation.
Exactly, I was wondering why are they not just working together instead of against each other.
I don't understand how one can save self-employment taxes when u S-corp yourself. With a W2, the S and the employee both do 50/50. It's still the same amount of $ so where is the savings? It's just different pockets, is it not? TIA
No because you pay yourself a salary and distribute profits as dividends at the end of the year. They are taxed at a lower rate. Also, it can be helpful when dealing with shitty states like California, and no self-employment tax.
@@ogsandwich I understand what you say about profit/dividends. I was strictly speaking about salary/wages. In the end, isn't the same amount for FICA whether you, the employee, pay 50% and the S pays the other 50%? or you take a 1099nec. Same pants, different pocket?
My takeaway from Kohler & co's statement is if you W2 yourself you save $ with FICA as opposed to self-employment taxes. Isn't it 15.3% either way?
I understand your presentation as is, But a precursor to any of this is 1st defining what the objective is and then considering the approaches to attainment. Such as, truly why be in either one when you can establish an unincorporated Non-Profit and not have to deal with complications that arise from "Profit motive". In other words, LLCs and S-corps lead to lots of overhead which takes away from one's personal time and the beneficial value of the individual's flexibility in the free time of attaining a minimally encumbered life! Running a personal program to optimize the best use of one's time to attain wealth by avoiding overhead should be the objective. Otherwise, you just fall into the trap of supporting the government. In a certain sense, the continuous time spent shuffling bookkeeping around to avoid taxes is just a waste of time and money. The model of "business (expense) has to grow constantly" to make more money is kind of like always taking three steps backward and one forward.
why not think of NOT having to pay the piper just to get a couple of more crumbs more?. After all, Government is just pissing off the beneficial interest attained by giving it away to special interests. Why not YOU BE THE ESPECIAL INTEREST?
llc taxed as a s corp
if you don't have any assets or employees, don't worry about your business designation. Worry about sells.
💪💪💪💪
What’s the best entity for day trading stocks?
Trust fund, lol
John, to get your question answered, please submit it to podcast.mainstreetbusiness.com/ - thank you!
comment
Robert deniro’s brother….
Do I really need llc for every rental home
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This is really borderline void of helpful content FYI. You guys spend so much time acting silly that it becomes hard to follow.
I'd like to know what I need to have a LLCor C corp would be better if I could buy a new vehicle for my business
Really, the LLC is little more than an overpriced DBA as far as I am concerned. Every company I have opened has started it's life as an S-Corp. It's a LOT of extra work, but it's also well worth it. Doubly so if you have multiple businesses: S-Corps can pay each other rent, they can lease from each other, depreciate etc., and moving that money around is LEGAL, and a good way to "burn off" profits!
If you aren't ready to set yourself up by following an actual business plan, stay with the LLC and pray for no audits. But if you are serious, and you're hiring employees, paying E&O policies, etc., the S-Corp is the ONLY viable alternative.
Can I pull my cash contribution from my LLC if I need the cash for personal purposes without a tax consequence?
To get your question answered, please submit it to podcast.mainstreetbusiness.com/ OR you can head to markjkohler.com/tax-advisor-network/ and get connected with one of our amazing Tax Advisors that can help you dive deeper into your questions. Thank you!