So You’re an S-Corp...Now What? [Essential Tax Tutorial]
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*Disclaimer: I am not a financial advisor nor am I an attorney. This information is for entertainment purposes only. It is highly recommended that you speak with a tax professional or tax attorney before performing any of the strategies mentioned in this video. Thank you.
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My three favorite channels: Karlton Dennis, Stock Brotha, & Richard Fain. Make my week complete!
I am 16 years old and I love learning about this stuff my financial life is going to be on point.keep giving us your knowledge about tax’s and your business knowledge ❤😊
Good job kiddo 🎉
If you're already educating yourself about this now, you'll be light-years ahead. I spent my teenage-hood fucking off and getting in trouble. 20 years later and I'm just now learning this stuff. Good on you.
I am proud of you kiddo 🎉
You’ll be very ahead in life by starting this early. Good job
Would love to see a video about the accountability plan in an S corp. The purpose, how to set one up, how to move the money around, pros vs cons, etc.
Very thorough. Thank you.
Excellent! Thank you! Well spoken and very relatable with important points
Excellent video! Thanks for sharing your knowledge
You did a phenomenal job explaining this. Thanks
holy moley im so glad i found your videos, they are a treasure trove of everything I've ever wanted to know with tax stuff..
Great stuff, very knowledgable
Awesome video Karlton! I really appreciate you dropping this knowledge. I just filed for my LLC so this helped a ton 🤝
So much value in this!
You’ve explained this better than anyone I’ve heard. THANK YOU!!!
Exactly the video I was looking for. How To Pay Yourself as S Corp more clear than ever before. Thank you
Most helpful tax video I have seen. I love learning about what is needed for an s-corp because all this is new and not many CPAs walk you through this. Much appreciated.
Excellent presentation. 👏
thank you for this video. Most clear and none ambiguous tax video I've ever watched.
Very nicely presented. Thank you.
Thank you for the info
Very informative this is great info! Appreciate the post!
Extremely helpful and informative. Thx a bunch Mr. Dennis. 💪🏽
Could you do a video about establishing a holding company
Amazing channel, I have a question could you make a video about some good tax breaks for those that are contracted and how we should be doing our taxes to make the most of it
This is exactly what I was looking for
Thank you for such detailed video. I just Subscribed to your Channel
This video answered all my questions!!! thanks
THAT WAS FIRE
Great Video Bro! ALot of Vaule keep teaching the correct way to do business
Nice solid info. Thanks
Refer to mark 19:42.
Sorry. Form 940 is NOT the annual equivalent of Form 941. Form 944 is.
Form 940 is for filing Federal Unemployment. Which is neither FICA, Medicare or Federal Withholding. And, that form is tied to your state unemployment filing.
How do I know? I am filing them right now for several companies in my tax firm.
Karlton, your a beast.
Thank you!
Thanks!
excellent video thank you
If you can make a guide video for new llc that would be highly appreciated
thank you thank you so much
Amazing video! Can distributions be used to invest into a joint account. Im starting an s corp and would like to use distributions to continue to invest into my vanguard account that I have with my wife as a tenants by the entirety?
Just a small mention; You can deduct the business part (half) of the self-employment tax as an expense. Also remember pay and file State and Federal Unemployment Taxes (SUTA / FUTA), and last but not least if applicable remember to take the QBI deduction which can save you a substantial amount in taxes.
Does self employment tax turns into an expanse when switching to S-corp?? Is not SE tax the liability? S-corp is a pass-though entity last like an Llc. Pls, explain.
@@irinajen6379 The employer part (half) is an expense for the company. S-Corp is not an entity type but an tax election you make by the IRS. Both a LLC and a Corporation can elect to be taxes as an S-Corporation.
❤❤❤ Thank you
I have set up a LLC since last year but haven’t operated it as of yet because of not fully understanding how/what to do, so thanks for this video! I have a particular concern, that I don’t wish to put out there. Is there any way that I can message you privately? Thanks!
Do you have to file a payroll tax return every quarter if you use a payroll company like ADP? Or do they handle that for you?
My other half and I have been together for 24 years. I have student loan debt and don’t work so I don’t have to pay right now. Should we get married to get better tax breaks. Oh and I have land not in his name that I think he can benefit from with right offs for his business. If we did farming too!! I know it’s a lot. Any info given is truly appreciated!!!❤
Can you please make a video for creatives such as freelance photographers who make under $15k annually as a side hustle? Do we qualify to elect to file as S CORP with an LLC
Is there a payroll app that you recommend using?
When you say take a distribution in the form of a car or a computer, are you saying the company buys it for you or is this an asset already owned by the company that you then take possession of for personal use?
I was told that if you have a business partner and are each taking distributions as an S-Corp, you are required to match distributions relative to each persons ownership percentage in the company. Is this true?
Thanks for combining all this vital information so we can be knowledgeable to educate ourselves on the rules.
I back dated an SCorp. For that filing tax year, I did receive a reasonable wage in w2. However, I did withdraws as cash transaction to pay for business credit cards. I also purchased property from the business account. Will these withdrawls be considered as a distribution. I think I have excess distributions since. I took out multiple business loans. Thank you Carlton.
You are the best
I was wondering if you have to file banking "Minutes" or meeting "Minutes" for an S Corp? How do you do this?
at 15:50: correct me if I'm wrong please: The 15.3% paid from salary portion is not accurate because this 15.5% is made up of 7.65% Fica, Medicare, Social Security and (Something else???)
You need to pay this 7.65% to FICA, Medicare, SS etc, regardless if salary or just self-employed income, so you are really only saving 7.65% , not the full 15.3% correct?
I’m still confused. If you’re not a shareholder, you can only take a reasonable salary or distributions but not both. Is that correct?
Can I use my s-corp distributions to fund my llc that I use as an investment company to buy small businesses and real estate?
I'm looking to purchasing some real estate in the near future. Should start with a regular llc or just start with an S corp?
If I am trading futures and I want to take advantage of the 60(long-term)/50(short-term) capital gains tax benefits, will an S-Corp allow me to make use of such benefit at a personal income reporting level?
In S-Corporation if you pay yourself a Salary do you also pay Unemployment State taxes, Training taxes and SDI taxes?
Can your ebook be considered an expense for my business for “ training “
Hi Mr Karlton, can I still switch from LLC to S Corp
Hello and thank you for this great video! I have a quick question, you mention that a reasonable salary is 30% of your net worth. Unfortunately, our business lost money this year, $15k, instead of profit. Should we keep the same amount of salary this year not knowing if we will have a profit or a loss? Thank you.
Following
Hey Dennis, if one has large deductions lowering a 200k net income to 30k would it still be necessary to be taxed as an s corp to save more money?
Probably not, unless you file all the necessary extra tax returns yourself (8 at minimum per year).
4 quarterly 941's
Annual 940
W-2
W-3
1120-S
Even if you do file them all yourself, your likely to have to purchase some sort of annual software subscription in order to do so. If not, your going to have to pay someone to file them. And this list doesn't take in consideration any additional state returns you might have.
Do we need to get with state to switch from an llc to s corp or just the irs? Thank you!
How do I find a individual/firm to help me with business/taxes? I'm in SE TN
I have a question, I worked in sales all of 2023 and had my earnings deposited into my personal bank account as usual, and then in December I started an S-corp after hearing coworkers tell me i should. I got it all set up and have an EIN number, but I am still waiting on approval from the IRS on the 2553 form ( which i heard can take up to 2 months ). With this all said, will I still be able to take advantage of paying myself a salary/distribution from the 2023 year or is it too late? Will i be able to take advantage of any tax savings via my scorp or will it only apply to everything i make in 2024? Lmk thanks!
Can s Coroporation run different kind business at the same time like food vendors and import goods?or for only one reasonable business?
If my S corporation was totally inactive throughout 2022 may I just file the form 1120S without submitting a K1 ?
What if there's 2 owner in an s corp? How do they pay?
How can you put money in your LLC TAXED as a scorp
This is such a great breakdown! Definitely learned a lot!
I have a question, when you have an LLC and you do an S-Corp tax election for taxes. Are you still considered an LLC or are you now considered a S corp because of the tax election?
I have the same exact question Carlton Dennis
@@cristy_matt same @karlton Dennis
Your still a LLC
I believe you have to do it with the fed & the state to be an s corp
You are an LLC taxed as an S corp. So you are still an LLC.
Jammed packed lol. Didn’t hold nothing back
QUESTION: ❓ My tax guy said I should be using a Payroll company to pay myself a salary as an employee of my business. But I hate that I have to pay $75 a month to get access to my own money. So you're saying that I can just make transfers from business to personal as distributions? Or should I keep payroll and just make transfers when needed as note them as distributions?
As an S-Corp, you still need to use a payroll company to run payroll to pay yourself the "reasonable salary". The remaining funds, you can use as a distribution.
Can I pay my home rental as my owner’s drawn???
Instead of taking a distribution of 60k to buy a car or travel and paying federal taxes. Can't I just buy the car with the business or pay for a "business trip" and mark it as business expense or loss? (thus not paying federal taxes)
But if you paying a cpa to file you taxes on you s Corp he is aware of those payments or not?
8:38 I can't stop laughing lol. I'm so immature smh
Loveeeeeeee❤❤❤❤❤❤❤❤❤❤❤❤ this
I have a 2 Milliom dollar business and I make about 500k in profit after deductions and losses. How do I become a shareholder in order to benefit from the hybrid payment model ?
You do not pay taxes on distributions, you pay taxes on the business income.
How can I have a consulting session with you?
I would like a consultation please
Maybe a dumb question: Lets say I switch to S Corp from an LLC, if I already have a business bank account, should I make a new one when filing the switch or use the same business bank account when my company was an LLC.
I have the same question @beanboy5972
Use the same one.
does anyone know if i file for an LLC and form an S-corp at the end of a year, will all the income from my business in the year I formed the business be counted as standard self employment income, or can I use the strategies listed above?
IE: self employed in January, form S-corp in Decemeber
What if you want to build your business on a defi crypto platform, and you start with your own funds and collateral, can you use yourself as your bank? Or MUST you get a business bank account? I don’t really want to use the banks money and I honestly don’t need to make a ton of profit. But in defi I would have to move to scorp for the X number of “members“ there would be. Members would be receiving much more % of business profits in my company 😊
Small percentage token holders getting fair benefits for their contributions. That’s what I’d like to build. Sounds like, if I want my own business, I still have to go by fed rules and use banks 🤔 I’ll be legal, but I’m going to try to find ways around those entities, other than paying my taxes. I’ll pay those. Wish I could see where they go on a blockchain and have governance on such issues.
So a flat screen for my office isnt an expense? Not sure i agree with that one lol
I liked your explanation.I am from India. Please don't mind.Are you a CPA?
Can I have family members as employees on my S Corp?
Did he bring up workers comp ,.
Are you for or against the company called Tailor Brands.?,.....
Need your help
What I don’t understand is if my s-Corp makes a profit, it rolls into my personal and it increases my taxable income and I have to pay taxes on it… but if my s-corp makes a loss, I have to stream personal money into my business to make payroll. So what’s the point? How do I actually make money and keep it
Those losses from the business go against your basis and flow back into your personal tax return
Firstly, that’s why you have a holding company so your profit flows up to pay back the holding company. Secondly your personal money you invest into your business should be paid back like a loan. Thirdly if you have money left over you should be reinvesting that money back into your company to offset the amount of taxes your business has to pay. Instead of paying $100k in taxes you should invest in other business write-offs to offset the $100k. Then you pay taxes on what’s left….
Watch all of his videos he has a ton of videos that explain this better than what I did.
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Texas doesn't have a yearly s-corp fee, right?
You will have to file an annual Texas Franchise Tax return.
@@ryanheller5424 cool. Thanks. I was already aware of that. I think as long as you make less than 1 million in revenue, you pay zero..
@@thadiesel7655 right, but you still have to file the annual return in order to stay in good standing with the state. Also, you will have pay and file unemployment taxes for wages you pay yourself. (You know, for in case you fire yourself. )
@@ryanheller5424 yessir.. very true.. I learned the hard way about not filing 1120s. I opened the biz in 2018 and elected s-corp, but decided to stay at my w-2 job until 2022. Irs assessed over 8k In late fees but they forgave me because i didnt know. Was thinking since i was operating the business that i didnt need to file. I know now. And adp handles all my payroll filings so I'm in good standing for good. Lol..
@@ryanheller5424 I'll just file the franchise tax return every year when I file 1120s..
Why aren't you working for me ... I need to watch ALL your videos
💚🙌🏽
This is somewhat me
How many people have you unnecessarily gotten to make the S-Corp election that would have been sufficientas a single member LLC? Do your clients realize that at minimum doing so makes them now have to file an additional 8 tax returns with the IRS per year? Not including any state return. But I suspect that is the key reason you are pushing so hard for S-Corps, is that it bolsters your billable hours.
Tax savings on s Corp if you make over 60j
Thank you for taking the time to write this comment. I'm about to open a business, and I was listening intently. Thanks for letting me know that I need to do more research and not take everything at face value.
@@allyourchildren1550as a fellow business owner, never just blindly take the advice of a singular content creator online. They certainly provide the basics for the whole “you don’t know what you don’t know”, but I would also highly advise consulting a tax attorney or some sort of CPA before making any business decisions. ✌🏼
So do those 8 forms and the presumably extra tax prep hours outweigh the 15.3% self employment tax your LLC is subject to? Just something else for business owners to think about.
@@MommaPreneur an S-corp is not completely exempt from the 15.3% SE tax. It just comes through in a different form. An S-corp owner must pay themselves a fair wage. That fair wage is subject to SS and Medicare taxes. These two taxes are what makes up the 15.3% SE tax. S-corps only don't have to pay the SE tax on the difference. The IRS has been collecting data for years and knows how much a fair wage should be. If you don't pay yourself that, then you will be subject to fines and penalties on top.
But to answer your question, yes, in most cases, the extra billing plus the additional taxes, usually outweigh the SE tax savings.
What if I have an s corp (nail salon) and have contractors instead of employees ? Do I withhold tax ?
Thanks!