Schedule a FREE CALL with a Tax Professional : go.truic.com/4i0WjGr (See how much could save on your taxes) For Businesses that are profitable, and the goal is to take the profit out of the company in a tax efficient manner, S-corp is a great tax designation to elect for your business., potentially saving thousands depending on the level of profitability of your business. Recommended formation service - We have negotiated with Northwest to provide the best discount and packages for our users, we get compensated when users use our discount links. Check the description box for a chapter-by-chapter guide of EVERY link mentioned! Here's the short list: Need help with Formation? We ❤️ Northwest - get their *best di𝘀𝗰𝗼𝘂𝗻𝘁* here: go.truic.com/3YAW8tO Your click gets you a great rate, and we earn a small commission. Thank you! 🏆 For S-Corp 60% 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁 link - go.truic.com/3AtFr7C Your click gets you a great rate, and we earn a small commission. Thank you! 🧮 To see how much you can save by forming an S corp check out our Scorp calculator: howtostartanllc.com/form-an-llc/llc-vs-s-corp-whats-the-difference#calculator
YOUR video was clear, succinct and informative. Thank you!!! I have asked this question to tax pros, business coaches, accountants and more each one left me scratching my head and more confused. I can now move forward with the decision that is right for me and my situation.
Thank you so much, I was being pressured to change my llc status to a scorp and I havent even been in business 4 months yet so that means no profits. This video is exactly what i needed!
First video that enabled me to see clearly that I don't need an S-Corp LLC - at least not yet. Good to know I can change later and I liked the fact that you kept the video concise, to the point and not filled with stupid interruptions of what other video hosts must think are entertaining or "cute". Don't have time to waste in my business lifestyle. Thanks.
Great video! My wife and I are TH-camrs and Bloggers and thought we maybe should go S-Corp, but after your clear explanation, we aren't ready. We will stay an LLC and form an S-Corp tax structure later.
Great vid! I love how you break down these 2 concepts making it easy for small biz bosses to understand. It's so important to know which one is right for you. It took me years to understand this and cost me tens of thousands of dollars, because I didn’t understand it when first getting started with my biz.
Thanks for sharing about your experience! And thanks for watching too :) Hopefully your business is thriving by now! If you ever need guidance on anything else, drop us another comment
Informative, no BS, short, sweet and to the point. Thank you for putting together such a succinct overview with some great points to consider. Best explanation I’ve seen yet.
Amazing video. thank you so much! Great pacing, well written, super informative, nice editing and animations to break up potential monotony. Very very well done. as a video editor myself send regards to the creative team and let them know they did an awesome job.
Wow, it's great to be able to make a tangible impact for our TH-cam and website visitors! Thanks so much for taking the time to share this with us. We offer a wide variety of free resources at TRUiC.com. Best of luck to you.
Your video and explanations were very clear. The presentation was well done. I have researched S-corp an LLC designations but could not wrap my brain around it all. Your video really cleared it all up for me. Thank you so much.
Explained very well. Planning on making a lot of money right away, S Corp. Not sure or just want it easier to invest back into the business, LLC. Well said. It always was confusing that I HAD to pay a reasonable salary with the S Corp with a small start up that generated little to no revenue. I should have left that as an LLC. Now I know when to use what entity for which businesses. Thank you
Thank you and thank God for finding this video, I was upset when I tried to apply last night via IRS website and system cut me off at 10pm. I was planning to apply again only to come on TH-cam to verify and learn more. After reading so many articles, kindle books and postponing applying because I was not sure which entity to pick this video helped me a lot.
Absolutely brilliant video. Clear, concise, and very well explained without using a bunch of financial jargon only financial heads would understand. Thanks Bro! Cheers!
Thanks for the feedback! We have to give some credit to our CEO and founder for his approach to explaining S corp-- simplicity and common sense are always the best approach. So, we have to ask, does electing S corp make sense for your business?
Maybe.... maybe not. Are you a single member LLC without any employees? There is case law that suggests the IRS will consider all distributions as salary. It's complicated don't make decision on an 8 minute generic video.
Thanks for this info. This helped me to decide what I need to do. I am going to stay a disregarded entity until I make a substantial profit from my business.
You are very articulate sir. I appreciate the transparency. This explanation is straight to the point. I want to start a real estate investment business, so this is helpful. I appreciate this video sir.
@@HowtostartanllcOfficial If I may add, the questions comes from the 3 drawbacks of an S-Corp section of the video. In efforts to start a business I've come to learn through this and several other videos about the tax benefits of an S-Corp however this in the first time that I learn about the drawback of reinvestment and it wasn't talked about in detail which lead me to think of these questions: 0) In what ways and through what services can the extra hassles and paperwork needed for an S-Corp be avoided or made easier to understand? 1) Why is there & what is the drawback to reinvesting into your company if you have filed taxes as an S-Corp? 2) How is there a benefit to reinvesting in a company if you've filed as an LLC? 4) Is it really a benefit from the financial stand point if I have to pay more taxes as an LLC? 3) How does one go about reinvesting in their company if they have filed their taxes as an S-Corp? 4) Would I be wrong if I underpaid myself a bit in order to keep more money in the company for let's say next year's marketing budget? 5) Would I be able to forgo distributions for one year in order to keep adding to my marketing budget? 6) What are key books to read in order understand tax rules on a deeper level?
"0. An S Corp does not pay neither FICA nor self-employment taxes on distributions. Whether the ""extra hassles"" will be of starting an S Corp will be worth it will ultimately depend on the state of your business, and the consequent degree of distributions that will be distributed after you have paid yourself and any other "employee-owner" a "reasonable salary". 1. If you have filed taxes as an S Corp, you will be required to pay yourself and any other owners a "reasonable salary". Since this is a requirement that must be satisfied, S Corp tax election can be disadvantageous when it comes to investing money back into your company because there will be less left --- you will not have the option of omitting your own or your partners salaries. 2. Not sure what you mean by filing as an LLC. An LLC can elect to file as a corporation, or as a disregarded entity, or as a partnership. 3. Reinvesting means simply not distributing profits to shareholders. The funds can lie idle (bolstering the balance sheet) or be spent to develop the business. Both are reinvesting. 4. No, but you would have to retain funds for marketing by limiting distributions, not your salary. 5. Yes. There is no mandate for an S Corp to pay distributions. 6. Tax issues undergo constant change. It may be better to keep up to date by checking in to the IRS Small Business and Self-Employed Tax Center. We also recommend reviewing our What is an S Corporation article: howtostartanllc.com/what-is-an-s-corporation
Thanks for this video. I’ve been thinking seriously about forming an S Corp since I heard it can save thousands on taxes, but my freelance business only made 43,000 last year and I needed all of that just to live, so😂 I guess not worth it just yet? Maybe if I get closer to 80,000 this year, it might be worthwhile. I still might get my LLC, to protect myself from any legal issues, before then. I also don’t totally understand about the money pulled in after distributions…so if I plan to reinvest that into the company (on, say, continuing education), I should maybe NOT consider filing as an S Corp? I guess I don’t get where the IRS thinks that money is going then.
Hey, thanks for the questions! It makes a lot of sense for freelancers to be thinking about S Corp. And that's because freelancers often don't have a lot of overhead expenses or opportunities to "reinvest" in. And without those opportunities, freelancers (and electricians, plumbers, consultants, etc) just end up paying a lot in taxes because they take all the profit as income. Regarding your questions: Here's one of our newer S Corp videos. It explains things a little better, in my opinion: th-cam.com/video/YlUM4IuYvTk/w-d-xo.html And here's our S Corp calculator (it will help you determine when you'll start saving, and how much): howtostartanllc.com/start-an-s-corp/s-corp-vs-llc-calculator Best of luck and let me know if you need more info!
Schedule a FREE CALL with a Tax Professional :
go.truic.com/4i0WjGr
(See how much could save on your taxes)
For Businesses that are profitable, and the goal is to take the profit out of the company in a tax efficient manner, S-corp is a great tax designation to elect for your business., potentially saving thousands depending on the level of profitability of your business.
Recommended formation service - We have negotiated with Northwest to provide the best discount and packages for our users, we get compensated when users use our discount links.
Check the description box for a chapter-by-chapter guide of EVERY link mentioned! Here's the short list:
Need help with Formation? We ❤️ Northwest - get their *best di𝘀𝗰𝗼𝘂𝗻𝘁* here:
go.truic.com/3YAW8tO
Your click gets you a great rate, and we earn a small commission. Thank you!
🏆 For S-Corp 60% 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁 link - go.truic.com/3AtFr7C
Your click gets you a great rate, and we earn a small commission. Thank you!
🧮 To see how much you can save by forming an S corp check out our Scorp calculator:
howtostartanllc.com/form-an-llc/llc-vs-s-corp-whats-the-difference#calculator
😊
Ok😊😊
YOUR video was clear, succinct and informative. Thank you!!!
I have asked this question to tax pros, business coaches, accountants and more each one left me scratching my head and more confused. I can now move forward with the decision that is right for me and my situation.
Thank you so much, I was being pressured to change my llc status to a scorp and I havent even been in business 4 months yet so that means no profits. This video is exactly what i needed!
What was the decision you made ? Did you elect scorp
You’ve had no profits in 4 months. Not a good sign personally. Should have at least monthly profit for the business after you’ve payed yourself etc?
How is your Business going Today?
@@mzwandiletitselonhlabatsi3504 great question
same, the two accountants I've talked to literally defaulted on s-corp and I have no idea how much I'm going to make.
This video beat the countless articles I've read in my efforts to understand all of this. Thank you!
First video that enabled me to see clearly that I don't need an S-Corp LLC - at least not yet. Good to know I can change later and I liked the fact that you kept the video concise, to the point and not filled with stupid interruptions of what other video hosts must think are entertaining or "cute". Don't have time to waste in my business lifestyle. Thanks.
Just what I needed. Just starting don't need S-Corp yet.
This is the clearest explanation I've ever seen on the topic with concrete numbers. Thank you for putting this together!
Great video! My wife and I are TH-camrs and Bloggers and thought we maybe should go S-Corp, but after your clear explanation, we aren't ready. We will stay an LLC and form an S-Corp tax structure later.
How about an Uber driver like myself I want to operate under an LLC. But not sure if I should do scorp lol ughh 🤣😩
@@mr_digdeeper I want to try uber black but I can't find no info what would be the best entity to form under. Were you able to find that info?
Great vid! I love how you break down these 2 concepts making it easy for small biz bosses to understand. It's so important to know which one is right for you. It took me years to understand this and cost me tens of thousands of dollars, because I didn’t understand it when first getting started with my biz.
Thanks for sharing about your experience! And thanks for watching too :) Hopefully your business is thriving by now! If you ever need guidance on anything else, drop us another comment
This video is awesome. You helped to clear my questions whether to form a LLC with S-corp status. Thank you so much!
Thank YOU for watching!
Which did you decide?
Best video on this! I’ve been researching for weeks lol thank you!
Ditto
Been watching vids for 2hr.30 and this nailed it with all the precision needed. thanks**
Informative, no BS, short, sweet and to the point. Thank you for putting together such a succinct overview with some great points to consider. Best explanation I’ve seen yet.
Wow thank you! We appreciate the comment! 😌
Amazing video. thank you so much! Great pacing, well written, super informative, nice editing and animations to break up potential monotony. Very very well done. as a video editor myself send regards to the creative team and let them know they did an awesome job.
Thank you for the compliments Jordan! We really appreciate it! ❤️
4:30 tells you all you need to know about the IRS...big, intimidating, and in charge....so don't mess with them! Great video-
Great video - well organized and understandable. Much appreciated!
Just the confirmation I needed. We have been paying too much tax as LLC, now I understand how we could save as SCorp. Thanks so much.
Wow, it's great to be able to make a tangible impact for our TH-cam and website visitors! Thanks so much for taking the time to share this with us.
We offer a wide variety of free resources at TRUiC.com. Best of luck to you.
Thank you! This saved me a lot of energy and prevented a lot of stress.
Glad it helped!
excellent surface information. Clear and straight to the point.
Thank you!
I found this very helpful. I am not a business person and he made this easy for me to understand. Thanks!
Your video and explanations were very clear. The presentation was well done. I have researched S-corp an LLC designations but could not wrap my brain around it all. Your video really cleared it all up for me. Thank you so much.
Boom you made those so clear and understanding. Thanks boss man.
Explained very well. Planning on making a lot of money right away, S Corp. Not sure or just want it easier to invest back into the business, LLC. Well said. It always was confusing that I HAD to pay a reasonable salary with the S Corp with a small start up that generated little to no revenue. I should have left that as an LLC. Now I know when to use what entity for which businesses. Thank you
Thank you and thank God for finding this video, I was upset when I tried to apply last night via IRS website and system cut me off at 10pm. I was planning to apply again only to come on TH-cam to verify and learn more. After reading so many articles, kindle books and postponing applying because I was not sure which entity to pick this video helped me a lot.
Wow, what an exceptional video, and so well articulated!
Thank you, this video was very helpful.
The best explanation ever, thank you
😊!
Glad it was helpful! 🙌
Thanks for clarifying the difference... making it simple.
Absolutely brilliant video. Clear, concise, and very well explained without using a bunch of financial jargon only financial heads would understand. Thanks Bro! Cheers!
Thanks for the feedback! We have to give some credit to our CEO and founder for his approach to explaining S corp-- simplicity and common sense are always the best approach.
So, we have to ask, does electing S corp make sense for your business?
@@HowtostartanllcOfficialyes it does.
You tackled all my concerns...Thank you
This a great video! Provides clarity on the different classes. Very helpful! Thank you!
Glad it was helpful! Thank you for the comment!
Excellent explanation! S-Corp makes sense for my business.
Maybe.... maybe not. Are you a single member LLC without any employees? There is case law that suggests the IRS will consider all distributions as salary. It's complicated don't make decision on an 8 minute generic video.
This was definitely clear and concise! Thank you for this information.
Thank you so much for this video! A wonderful breakdown.
Thanks for this info. This helped me to decide what I need to do. I am going to stay a disregarded entity until I make a substantial profit from my business.
Glad it helped Darlena!
Thank you! This video helped me so much!
Like wow, like.. this was super simple and understandable.
Thank you so much.
That's great to hear! Glad we could help :)
Great explanation. The visuals help a lot also.
Easy to understand. Thank you for explaining
Great video! Love the simplicity, thank you.
Great speaker! Thanks for the help with my decision!
This video was EXACTLY what I was looking for. It's month one after incorporating my LLC. I think I'll wait on this election :)
This was an excellent video, straight to the point very informational thank you
Thank you, glad it helped!
Excellent video explanation, thank you!
Thank you!
THIS WAS SO HELPFUL! THANK YOU!
Thank you for this information. Very clear way of explaining.
Good stuff. Keep it going. Clear, precise, on point. Thank you.
Thanks for tell the benefits of LLC AND S-CORP
beautiful explanation thank you for the difference in tax classifications !!
this video was so helpful...thank you!
You're very welcome!
This was so easy too understand
Thank you 🙏🏽
SO informative. Thank you!
This is an amazing video, wow thank you TRUiC
Great job of explaining!
You are very articulate sir. I appreciate the transparency. This explanation is straight to the point. I want to start a real estate investment business, so this is helpful. I appreciate this video sir.
If wanting to start a real estate investment business. What did you end up going with ? And how is it going if you started ?
Thank you for getting right to the point and giving clear and concise information
Glad it was helpful! Thanks for watching
nice work homie
Very good information and easy to understand, thank you!
Amazing video. Well explained and the quality is superb
Great video. You made this so easy to understand.
THANK YOU!!!! Incredibility helpful.
Thanks for the simple to follow and easy to understand video. The production value was very good as well.
Super helpful. Thanks!
Best video I’ve seen. Thank you
Awesome review! Thank you
This is very well explained and helped me make a decision. Thank you. Subscribed
So happy we could help! Let us know if we can guide you to any other resources :)
Perfect video. Answered my question. Well put together.
This was a huge help in wrapping my head around this. Thanks so much for the concise writing and good visuals. Much appreciated!
We appreciate the feedback, and we're glad that it was useful!
Thank you for this video!!
Finally! A video that explains all this clearly!
So happy we could help!
This was great video
Thank you!
Thank you! So concise and clear!
amazingly put together well done thank you!!
Thanks for watching, here's another helpful S Corp video that our viewers like:
th-cam.com/video/YlUM4IuYvTk/w-d-xo.html
Very informative. Thank you.
You guys are awesome!
YOU'RE awesome!
Excellent video. Thank You
Awesome video thanks for sharing!
Do y'll have videos that go into depth as to the ways in how to reinvest in your company?
Currently, we do not, but that's a great suggestion! We might be able to make that happen, so stay tuned :)
@@HowtostartanllcOfficial If I may add, the questions comes from the 3 drawbacks of an S-Corp section of the video. In efforts to start a business I've come to learn through this and several other videos about the tax benefits of an S-Corp however this in the first time that I learn about the drawback of reinvestment and it wasn't talked about in detail which lead me to think of these questions: 0) In what ways and through what services can the extra hassles and paperwork needed for an S-Corp be avoided or made easier to understand? 1) Why is there & what is the drawback to reinvesting into your company if you have filed taxes as an S-Corp? 2) How is there a benefit to reinvesting in a company if you've filed as an LLC? 4) Is it really a benefit from the financial stand point if I have to pay more taxes as an LLC? 3) How does one go about reinvesting in their company if they have filed their taxes as an S-Corp? 4) Would I be wrong if I underpaid myself a bit in order to keep more money in the company for let's say next year's marketing budget? 5) Would I be able to forgo distributions for one year in order to keep adding to my marketing budget? 6) What are key books to read in order understand tax rules on a deeper level?
"0. An S Corp does not pay neither FICA nor self-employment taxes on distributions. Whether the ""extra hassles"" will be of starting an S Corp will be worth it will ultimately depend on the state of your business, and the consequent degree of distributions that will be distributed after you have paid yourself and any other "employee-owner" a "reasonable salary".
1. If you have filed taxes as an S Corp, you will be required to pay yourself and any other owners a "reasonable salary". Since this is a requirement that must be satisfied, S Corp tax election can be disadvantageous when it comes to investing money back into your company because there will be less left --- you will not have the option of omitting your own or your partners salaries.
2. Not sure what you mean by filing as an LLC. An LLC can elect to file as a corporation, or as a disregarded entity, or as a partnership.
3. Reinvesting means simply not distributing profits to shareholders. The funds can lie idle (bolstering the balance sheet) or be spent to develop the business. Both are reinvesting.
4. No, but you would have to retain funds for marketing by limiting distributions, not your salary.
5. Yes. There is no mandate for an S Corp to pay distributions.
6. Tax issues undergo constant change. It may be better to keep up to date by checking in to the IRS Small Business and Self-Employed Tax Center. We also recommend reviewing our What is an S Corporation article: howtostartanllc.com/what-is-an-s-corporation
Well explained! You guys help a lot!
clear and detailed explanation, thank you!
This is an awesome video with great information. Thank you.
Glad it was helpful!
Nicely put. Simple and informative. Aloha
Glad it was helpful! Thanks so much for watching
This was great, thanks
Glad you enjoyed it!
This was very helpful. Thank you!!
Glad it was helpful!
Clear information and I really gathered information
That was amazingly educational. Thanks!
Thanks for this video. I’ve been thinking seriously about forming an S Corp since I heard it can save thousands on taxes, but my freelance business only made 43,000 last year and I needed all of that just to live, so😂 I guess not worth it just yet? Maybe if I get closer to 80,000 this year, it might be worthwhile. I still might get my LLC, to protect myself from any legal issues, before then. I also don’t totally understand about the money pulled in after distributions…so if I plan to reinvest that into the company (on, say, continuing education), I should maybe NOT consider filing as an S Corp? I guess I don’t get where the IRS thinks that money is going then.
Hey, thanks for the questions!
It makes a lot of sense for freelancers to be thinking about S Corp. And that's because freelancers often don't have a lot of overhead expenses or opportunities to "reinvest" in. And without those opportunities, freelancers (and electricians, plumbers, consultants, etc) just end up paying a lot in taxes because they take all the profit as income.
Regarding your questions:
Here's one of our newer S Corp videos. It explains things a little better, in my opinion: th-cam.com/video/YlUM4IuYvTk/w-d-xo.html
And here's our S Corp calculator (it will help you determine when you'll start saving, and how much): howtostartanllc.com/start-an-s-corp/s-corp-vs-llc-calculator
Best of luck and let me know if you need more info!
Very useful video. Thank you!
Glad you enjoyed it! 😀
Thank you for this great info!!!
Amazing video. Thank you so much !!!
Great explanation.
Thank you for making this video....
Thanks for watching!
Thank you for this video. Very helpful!
Glad it was helpful! You're welcome!
so good thank you
Thank you!
That was helpful. Thanks.
Glad it was helpful!
THANK YOU!! You rock! :D
Impressive, great channel. I think I've found my new weekend movies 🎥.
Hey man great video i just got taxes 8k by the irs wished i had seen this video before much love from CALI
what did u file as?
Wow, excellent explanation, thank you!