LLC vs S Corp: Which Should You Choose In 2024?
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- เผยแพร่เมื่อ 9 มิ.ย. 2024
- LLC vs. S-Corp Comparison by a Trusted CPA
My name is Sherman the CPA and I specialize in tax planning for businesses with over $100,000 in income at mycpacoach.com.
I am fresh off of finishing a tax plan for a client that saved them $20,000 in taxes from converting to an S-Corp, so today I want to walk you through some of the benefits of an S-corp versus an LLC.
When I work with my clients, one of the very first things I look at is their entity structure to determine if they are operating in the most tax-efficient manner.
And oftentimes, they are either an LLC or Sole Proprietor thinking about becoming an S-Corporation or C-Corporation.
And based on their unique set of circumstances, I will help them choose the best entity to operate from.
So today, I want to provide you with some valuable information based on my experience to help you navigate through this.
If you watch this video until the end, you will learn:
What is an S-Corp?
The benefits of an S-Corp vs an LLC
Some major drawbacks of an S-Corp
When it makes sense to elect S-Corp Status vs. an LLC
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
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Bro this guy covered everything😂 So basically if you are making serious cash..(70,000+)
(LLC-S Corp) Tax status is obviously the better choice, EASILY. Yes the monotony of bureaucracy, learning time and the bs IRS tries to get you to do is scary but not as much as Taxing more of your hard earned cash. 😂. Thank you guys👍👍👍
Great video, clear and simple way of making the information more digestible for non tax experts 😂 very educational thanks
Beautifully laid out/explained
Very informative. Thank you
Really glad for this channel because I just filed for my LLC and I'm building an airplane while in flight.
How many persons have an LLC and EIN that has never been funded yet!
thank you so much for your video!! We just turned into an s-corp last year and your video was exactly what I needed. Still feeling very overwhelmed with accounting specs but your video helped so much. It's been really hard to find a trustworthy and reputable accountant. If you have any suggestions for how to find one please share your thoughts.
Thanx for explaining the pros, cons, and the differences between an LLC and an S corp.
Perfectly said 👏🏽👏🏽👏🏽👏🏽
Thank you
Thank you ❤
I like that you spend time on the disadvantages. An S corp is appealing to my wife and I because we are a service llc and the earning vary significantly year to year. We’d like to be able to even out that variability and utilize deferred compensation in order to retire sooner. One big question is how you convert that 1st year. Does it have to be on Jan 1st so you immediately start paying salary and taxes or can you convert mid year and do a catch up payment.
My CPA says I can pay myself more than $50,000 a year thru the S Corp...is this true? I've heard/read from different outlets that the maximum is $50,000. So I am confused. I am in California.
There’s no cap to how much you can pay yourself as an S-Corp. the law says “pay yourself a reasonable amount as an employee” which means if your company makes 300k a year profit, paying yourself 20k/year is not reasonable.
I've been an LLC for way to long. I should have switch over 7+ years ago. Fudge!
BTW, awesome video!
I didn't catch the calc on the self-empl tax comparison:
LLC: $150,000 income - $23,000 (15.3% tax) = $127,000 → after-tax net income, all yours!
S-Corp: $150,000 income - $60,000 (salary) = $90,000 → not yet available for you, it's still subject to federal income tax and potentially state income tax. Out of those 60K you get $50,820 net.
So, what did you save?
You didn't pay attention.
What about the other half of social security and Medicare taxes.
What about the QBI?
What about the 50% self employment tax deduction
How does that all truly affect the benefits
If you have an LLC that hasn't elected to be an S-corp, but you have employees don't you also need payroll services?
I would think so
I am going to choose to be a SMLLC taxed as an S-Corp next year. Where do I send my quarterly fed and state withholdings each quarter when paying myself a reasonable salary?
You should look into the *Profit First* system. That's what I will use when I start my business. I want to use an accountant who uses it bcus it's the best way to go to ensure you're totally IRS compliant. A business owner on TH-cam *Torrence Hart* really explains it best on how she uses it.
Most small business do not understand that you mean net profit as the income you’re talking about.
If we a family of five , form a C corp , and we parents want to keep anonymity of our stakes in C corp , and want to apply for SSI benefits ( not eligible for Medicare and social security , as we came as legal residents in our late sixties ) , will that be possible ?
hellow, if I sell a parcel of land, in 2024 no house on it just vacant land for a profit on what I paid for it, can I report it in April of 2024 to use for 2023 up coming taxes?.
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