No one ever mentions the tax responsibility from the S Corp by issuing a W2. The corporation must also pay its fair share of payroll taxes to the IRS and local tax authority, in addition to the taxes paid by the W2 recipient. Most people just think, oh, I'll just issue a W2 to my 'employee' and that's that. Nope, not that cut and dry. The corporation must also pay all the federal and state taxes, which is equal to the same amount the employee deductions to those same entities. So please make sure you have enough capital to account for payroll... Which in addition includes state and federal workers comp, unemployment, and even local municipality taxes like we pay here in NYC.
Consider that by 'paying' a business owner's taxes that means the tax you think are "paid" are actually withholding taxes. If an employee is paid then the tax is withheld from that person's earnings so yes - the business has to then give it (or as you call it "pay" it) to the gov. If withheld from the owner, that is tax paid-in on his 1040. But if you're in NYC it's even more ridiculous I'm sure! My explanation is monies paid by your business on behalf of your employee (withholding). It's not a tax the business is paying. I hope that made sense!
@@danawaldrop4930 😶So how does that work out (and account) for a *Single Member* business who outsources (the labor) through another company?🤔Are you paying withholding tax for only yourself?
@@danawaldrop4930in addition to withholding the employees taxes and paying those to the government a business must also pay their half of the payroll tax. 7.65% from the employee, 7.65% from the employer.l. You seem to be missing that.
@@helprehouseourvets6919 Shouldn't outsource labor but yes, at least you still have the business payroll tax paid at the end of the year. And consider - that WH tax from your paycheck is a minus from taxes owed once your return is calculated. So you use both employee and employer tax on each return. Your 1120, you deduct the tax paid by the business. On your 1040 your W2 refects tax paid thru your withholdings. Keeps you from owing taxes at the end of the year. But DJT is about to end the income tax and we'll only have a sales tax so I wouldn't focus on this.
2023 been a challenging year, but I managed to make $250,000 before taxes as the sole breadwinner and head of household. It's a good starting point, but I'm always looking ahead on how to improve.
You might want to consider starting with a different approach, like the snowball method. Focus on one loan, usually the smallest one, and direct all your resources to pay it off while maintaining payments on the others.
Another option is to work with a money coach or investment advisor. While an investment adviser focuses on the long term, a money coach can help pay off all your debts, maximize cash flow, and create systems for proactive money management.
A financial adviser could also provide a holistic plan for your money, addressing both short and long-term goals. I've been consulting with Monica Mary Strigle from WA, and it's been transformative. Making $662k in the past 8 months from barely $400k gives me high hopes for 2023.
That's impressive! Who is Monica Mary Strigle, and how can I reach her? I've tried finding a good adviser around me, but it seems impossible without exorbitant fees. Can you share her fee structure as well?
Monica Mary Strigle is highly ranked and renowned among investors in WA. I was referred by a friend at the Washington Post. You can find her online, and her fee structure is reasonable considering the invaluable guidance she provides.
Love your pitch mark. I am struggling through my sole proprietor taxes from 2022. I'm a MD and being a sole prop is killing me. I will def get set up with y'all. I'm in WI. It took the pandemic for me to realize I already spend 3k-5k a year on malpractice. I don't HAVE to just contract for a place. Sorting through the cashapp payors, all my 3rd party pay is out of wack. I think I only started to move beyond my rent and have 1k a month, was due to spending money to make money. My addiction patients get better, but then they don't need me anymore (BC I ROCK) and don't rip patients off. Looking forward to some aggressive tax pro to help me! Will call. The taxes must be done by Oct 31.
Hey, thank you for the video. Very well put together. I'm just wondering around the 16:00 mark, when you were talking about filing s Corp and the more you make the less you pay on taxes as pay roll decreases, what is that other money classified as? The money that isn't payroll. And theres.. just.. no self employment tax on that portion? Interesting! Thanks for the video again. I need to look into your tax advisor network you mentioned. I'm just starting off
Don’t know if you ever got the answer, but for S-corp, after you take into account all the expenses (which the payroll taxes are part off) … the Net Profit or Loss flows through from the S-Corp to you the individual(s) to your personal return as distribution and usually taxed at the individual income tax rate.
Oh HALLELUIAH! Someone who finally outlined why I should go S-Corp instead of LLC. I'm running up against those pesky self-employment taxes, and want an entity that I can use for investments, etc. Thank you!
Actually, here’s where people are confused. You still create an LLC, but you file as an S-Corp. Form F2253 is what you submit to designate that you’re going to file as an S-Corp. people confuse this all the time, and think they are mutually exclusive when they are not. Start your company as the LLC, and just file the paperwork. Totally unrelated. I did it wrong day one, fixed it day two and love it.
An llc is a great starting point when revenue is low. As income grows the transition makes sense. S corp earns you a qualifying income deduction which reduces the 15.3 % and saves your company money in tax. Use the capital to expand or fund additional advertising, upgrade lead generation partnerships etc.
There’s another con on a s-corp status. As an owner officer…it’s health insurance. Your company can pay your health insurance. But it is added back in to your W2 as income. It is NOT pre-tax like your employees. Health insurance paid in part by your employer is considered a “fringe” benefit. S-Corp owners you are not entitled to fringe benefits. If done correctly you don’t have to pay self employment taxes on it BUT it does count as income and is part of your taxable fed income. Now…the somewhat of a relief action would be to take your expenses incurred would be to claim it on your personal taxes. S-Corp has its disadvantages. And if your heath insurance cost is $16,000 a year, that’s a big con.
I feel like such a scholar to have traveled the financial business channels comments to discover this gem! The official connect of these two amazing channels. What a treasure 😀
Thank you for explanation. Im opening a construction business getting up to 8 million in funds. Before having an llc or anything I got a 150k contract signed. I called an insurance they told me itd be 50% cheaper on filing as a scorp and be 2 weeks faster to start up. I was worries if operating as an scorp would screw me on taxes looks like its the opposite.
It would be a good idea to do a video explaining what to do when the SCorp has losses. (I haven't listened to it yet.) A video on calculating Basis would get watched a lot too!
@@eoliverjdmba A ton of details you left out but yeah, that's what I would like to see a video on. But I'm praying we won't have income taxes at all after Jan 20th. :)
Agree with the video with one misleading exception. I don't think you need to be incorporated in the state you reside in to take advantage of the S Corp tax advantages. FICA is a federal tax concept. You have to pay your state taxes if applicable regardless of how you split income as w2 salary or distribution. So you could start a business in Wyoming as an LLC (taxed as a S Corp) to take advantage of the privacy and asset protection features. While that may not shelter you from state taxes if your business operates in another state, you should still be able to to exempt yourself from FICA for the S Corp's distribution income. (I think.) Please correct me if I'm wrong.
Thanks for sharing Mark! What if we live outside the USA and are American. Does that change how we choose what state to have our business based in? I'll be watching and reading more of your content from now on. Thanks again!
@@MiyaJeanLaroiiI worked for an accounting tax firm that did business taxes. Usually once a sole-prop/small business starts making about $40-50 thousand in Net Profit and we are there is going to be continuity……we start advising them to elect for the S-corp.
My business is an LLC taxed as an S-Corp. It saved me tons in taxes last year. But you say you must pay state taxes where you sit your butt in your seat. What if you are a military spouse and your home of record legally is elsewhere other than where you sit making your money. Per the Military Spouse Residency Relief Act, I should be able to maintain legal residence in the state where we used to live. My online business still operates out of that state. My EPA says this is okay per the Servicemember's Civile Relief Act. He says once we change our domicile with the military we will need to do the business state switch at that time. But now I worry after watching this video. This is all very hard to navigate when you move ever 2 years and have a successful business that you operate out of the home.
You should be fine. I'm in the military and my wife works in one state but get tax states from my home of record but I'm exempt from state taxes, so she pays no state on her employment and if she does we get it all back when we file taxes.
Hey do you have a team or connections in Philadelphia Pennsylvania specifically? Philly has a draconian and unforgiving tax system, so it must be a CPA in the city, not near, because you have to be a damn near expert to deal with the municipal system of Philadelphia. I imagine there are similar nightmares for small business in NYC, Chicago, LA, Phoenix, Miami.....you get the point.
I loved this 🎉 my concern is that I travel full time and although I have a home address, it’s really just my family’s residence and I don’t reside there. They usually forward things to my current addresses and I pay them for it. I don’t have an llc, I have so many financial boundaries bc of where my income comes from, I don’t even know where to start filing for a biz license. Help please?
1 big thing I have is what if I'm say oregon based and 80-90% of business or more is done here but I'm a roof and gutter cleaning business (to start add pressure washing window washing then more getting into minor construction even) do I then need another llc/s Corp in Washington and need to take sales tax and such there and can you go into this
Nobody has answered my question, though. I understand the tax breakdown of an s corp. However, when I open my LLC with my secretary of state. My next step is getting the ein#. Do I get the ein as an LLC or an S Corp?
You can a get a EIN in your own name. But it would normally be best as a LLC. Then later on you can choose how you would like to be taxed by the IRS. You can “form” a S-Corp. S-Corp is just a method of taxation. LLC is an entity. Partnership is an entity. INC is an entity. So pick your entity. Most small businesses pick LLC. Then you can decide how to be taxed. -Taxed as Partnership LLC or sole prop -Taxed as a S-Corp. Rule of thumb is about 50K gross for yourself then S-Corp would save you in taxes. -Taxed as a C-Corp. Which normally reserved for larger companies. Public companies. Also can have adverse tax issues like duel taxations.
You will get an EIN as the LLC but then must submit Form 2553 to request to be an S-Corp. Form is found on IRS website and can be mailed in. It's actually quite a simple process.
I’m excited to use these guys create my trifecta just put in an offer that was excepted for a business in Chandler Arizona going to create an S Corp.😅🎉
All your info is SO great, Mr. Kohler. Thank you for everything you do here. I'm a single-owner Sub Chapter S Corp. I *think* I must take all of 2023's K-1 income, but I won't know what that is until into 2024 when all accounts are settled and my Accountant finishes December. But I heard that I must withdraw all my 2023 K-1 earnings in 2023. How is that possible with the reporting lag?
Mark, I love the video. I do have one question though, I own a Wyoming LLC for my real estate because it can be anonymous when people look up the property. I believe Delaware is the same way, when you say different state LLCs don’t matter do you mean from a state tax perspective or just in general? Because there may be some qualitative reasons to be in some of these states from what I’ve learned. Let me know your thoughts if you see this, thank you!
Couple questions say I’m starting a business that has to run for a few months then can get a higher certification and do more business with that cert, but if I change the the entity type I lose the cert and have to start over should I just start out as an s corp. also if I’m trying to start a business in ca but my license is in nv should my llc be in nv or in ca ? And if my llc is in nv can I register my city business licen in to that nv llc ? Or does the llc have to be in ca as well?
Buy $1,000 worth of bitcoin with that every year, and historically speaking, it will appreciate +/- 135%/year. Do the math on that while considering the $1,000 will depriciate ~7-14%/year and that $1,000/year is definitely worth it.
Are business loans from a 3rd party such as a lender guaranteed by me as a 100% shareholder in my SCorp contributions that can be added to my basis????
Only shareholder loans to an S Corp will give you “loan” basis (different than “stock” basis). In a partnership (the default treatment for a multi member LLC) you get debt basis for recourse debt and qualified nonrecourse debt.
Should my holding company be an llc taxed as a c-corp and my operating llc be taxed as a s-corp? The operating llc is for my real estate interior design business. Thanks!
Stop making things difficult for yourself. Forget about holding companies and c-corps and all that crap. Get one entity that’s an LLC and start from there. Most importantly you have to make money before you can even think about these types of strategies. And even if you are making money, you rarely need holding companies. They provide no tax advantages unless we are talking about SEP retirement plans. They provide some asset protection, but not much else. Then you need to file two tax returns and have two sets of accounting books, which will cost you $1k in tax filings plus accounting fees. Stop making business so difficult.
Typically, you only need one LLC for your business (unless you have others with partners or multiple successful enterprises). If you have other significant safe assets outside of a retirement plan or real estate investments, that would be in a separate entity. Most have too many entities, but everyone's situation and risk tolerance differ. These guys in the video are great to follow and learn more from.
We got you! Head to our Main Street Tax Pro Network who help clients nationwide and would love to help you - please get connected to one of them here: taxadvisornetwork.markjkohler.com/
no you don't lol. perhaps you're misunderstanding. You will pay social security on the 160,000, but the money made past that won't. So let's say you made 200,000. 160,000 of that money will be taxed by social security while 40,000 will have no social security taken from it@@jimross2101
I have a LLC business without employees (providing design services) with Scorp Status. I pay myself and get a W2. My partner is retiring and removing himself as a member leaving me as a single member ownership. I plan on revising members to include my spouse with 51% (me), 49% (spouse). Spouse and I also have an LLC with an S-corp election status for a rental company (50/50 member split myself & spouse). I know I know, it shouldn’t be an scorp!. We have not used the LLC yet because we have not purchased a rental yet (in the works though). Planning on reversing the S-corp election on that LLC before acquiring a rental and quitclaiming property to the LLC. Am I on the right path here….?!?!
Terminating the S election would typically result in that LLC then becoming a “C” corp. just save or scrap that LLC and incorporate a new one and LEAVE it as a default partnership if the intent is to hold real estate in it.
You said you have an LLC, but pay yourself and get A W2. Are you saying you give yourself A W2? Because you can't do that an LLCs is a pass-through for taxes so your just creating more taxes.
@@brewdog8568 You're wrong. If an LLC makes an S-election, an owner-employee is actually REQUIRED to draw a W-2 salary for reasonable compensation. And they're not creating more taxes, they're lessening them. The remainder of the profit the LLC earns escapes payroll taxes (SS/Medicare) as the owner's distributive share is no longer subject to SE tax as it otherwise would have been had the LLC remained taxed as either a disregarded entity (if owned by a sole member) or a partnership if multi-member. Also, @laurak9472 terminating the S-election is considered a taxable event. If there's no appreciated property within the LLC yet, likely not any concern. I'd recommend discussing with your CPA first (or finding one if you don't already have one...) before you do anything. It might be worth closing that LLC and just starting a new one. Again, discuss with your CPA and possibly attorney too.
I have two commercial rental properties and both are currently LLC's. Is it possible to file for "S" Corp status for 2023 and can this be done now before the end of 2023 or do I have to file it for 2024?
Mark, for the love of god can you please explain to people that they need an accountant before they think they can just file to be an scorp. It’s astonishing how many business owners don’t have an accountant and they watch some trash videos online by individuals who have no knowledge on taxes or accounting and they do everything wrong.
@@RichAyers yes. Don’t worry about incorporating. It’s no difference than starting an LLC. Then elect to be taxed as an scorp. LLC is a business structure/entity and scorp are not business entities. An scorp is a tax election created by the IRS. Let me know if you need help. I’m in the Florida area as well. St Pete to be exact. I have my own accounting and tax firm. We can swap contact info if you’re interested.
No one ever mentions the tax responsibility from the S Corp by issuing a W2. The corporation must also pay its fair share of payroll taxes to the IRS and local tax authority, in addition to the taxes paid by the W2 recipient. Most people just think, oh, I'll just issue a W2 to my 'employee' and that's that. Nope, not that cut and dry. The corporation must also pay all the federal and state taxes, which is equal to the same amount the employee deductions to those same entities. So please make sure you have enough capital to account for payroll... Which in addition includes state and federal workers comp, unemployment, and even local municipality taxes like we pay here in NYC.
Consider that by 'paying' a business owner's taxes that means the tax you think are "paid" are actually withholding taxes. If an employee is paid then the tax is withheld from that person's earnings so yes - the business has to then give it (or as you call it "pay" it) to the gov. If withheld from the owner, that is tax paid-in on his 1040. But if you're in NYC it's even more ridiculous I'm sure! My explanation is monies paid by your business on behalf of your employee (withholding). It's not a tax the business is paying. I hope that made sense!
Yeah … payroll taxes suck
@@danawaldrop4930 😶So how does that work out (and account) for a *Single Member* business who outsources (the labor) through another company?🤔Are you paying withholding tax for only yourself?
@@danawaldrop4930in addition to withholding the employees taxes and paying those to the government a business must also pay their half of the payroll tax. 7.65% from the employee, 7.65% from the employer.l. You seem to be missing that.
@@helprehouseourvets6919 Shouldn't outsource labor but yes, at least you still have the business payroll tax paid at the end of the year. And consider - that WH tax from your paycheck is a minus from taxes owed once your return is calculated. So you use both employee and employer tax on each return. Your 1120, you deduct the tax paid by the business. On your 1040 your W2 refects tax paid thru your withholdings. Keeps you from owing taxes at the end of the year. But DJT is about to end the income tax and we'll only have a sales tax so I wouldn't focus on this.
2023 been a challenging year, but I managed to make $250,000 before taxes as the sole breadwinner and head of household. It's a good starting point, but I'm always looking ahead on how to improve.
You might want to consider starting with a different approach, like the snowball method. Focus on one loan, usually the smallest one, and direct all your resources to pay it off while maintaining payments on the others.
Another option is to work with a money coach or investment advisor. While an investment adviser focuses on the long term, a money coach can help pay off all your debts, maximize cash flow, and create systems for proactive money management.
A financial adviser could also provide a holistic plan for your money, addressing both short and long-term goals. I've been consulting with Monica Mary Strigle from WA, and it's been transformative. Making $662k in the past 8 months from barely $400k gives me high hopes for 2023.
That's impressive! Who is Monica Mary Strigle, and how can I reach her? I've tried finding a good adviser around me, but it seems impossible without exorbitant fees. Can you share her fee structure as well?
Monica Mary Strigle is highly ranked and renowned among investors in WA. I was referred by a friend at the Washington Post. You can find her online, and her fee structure is reasonable considering the invaluable guidance she provides.
Thank God for this man and his team! 🔥🔥🔥
Awesome content. 👌
10:50 I have zero idea what you are talking about but LOVE the passion
Love your pitch mark. I am struggling through my sole proprietor taxes from 2022. I'm a MD and being a sole prop is killing me. I will def get set up with y'all. I'm in WI. It took the pandemic for me to realize I already spend 3k-5k a year on malpractice. I don't HAVE to just contract for a place. Sorting through the cashapp payors, all my 3rd party pay is out of wack. I think I only started to move beyond my rent and have 1k a month, was due to spending money to make money. My addiction patients get better, but then they don't need me anymore (BC I ROCK) and don't rip patients off. Looking forward to some aggressive tax pro to help me!
Will call. The taxes must be done by Oct 31.
Look up a *Profit First* firm called CorpNet who has advisors on staff who could potentially give you advice. Good luck!
Hey, thank you for the video. Very well put together. I'm just wondering around the 16:00 mark, when you were talking about filing s Corp and the more you make the less you pay on taxes as pay roll decreases, what is that other money classified as? The money that isn't payroll. And theres.. just.. no self employment tax on that portion? Interesting! Thanks for the video again. I need to look into your tax advisor network you mentioned. I'm just starting off
Don’t know if you ever got the answer, but for S-corp, after you take into account all the expenses (which the payroll taxes are part off) … the Net Profit or Loss flows through from the S-Corp to you the individual(s) to your personal return as distribution and usually taxed at the individual income tax rate.
Oh HALLELUIAH! Someone who finally outlined why I should go S-Corp instead of LLC. I'm running up against those pesky self-employment taxes, and want an entity that I can use for investments, etc. Thank you!
Actually, here’s where people are confused. You still create an LLC, but you file as an S-Corp. Form F2253 is what you submit to designate that you’re going to file as an S-Corp. people confuse this all the time, and think they are mutually exclusive when they are not.
Start your company as the LLC, and just file the paperwork. Totally unrelated. I did it wrong day one, fixed it day two and love it.
An llc is a great starting point when revenue is low. As income grows the transition makes sense. S corp earns you a qualifying income deduction which reduces the 15.3 % and saves your company money in tax. Use the capital to expand or fund additional advertising, upgrade lead generation partnerships etc.
i dont understand this yet but im saving it for later.
Thanks for sharing such a video. Much needed. It was so convincing. Nice work.
There’s another con on a s-corp status.
As an owner officer…it’s health insurance.
Your company can pay your health insurance. But it is added back in to your W2 as income. It is NOT pre-tax like your employees. Health insurance paid in part by your employer is considered a “fringe” benefit. S-Corp owners you are not entitled to fringe benefits.
If done correctly you don’t have to pay self employment taxes on it BUT it does count as income and is part of your taxable fed income.
Now…the somewhat of a relief action would be to take your expenses incurred would be to claim it on your personal taxes.
S-Corp has its disadvantages.
And if your heath insurance cost is $16,000 a year, that’s a big con.
Appreciate the information!
You provide exceptional lesson and advices. Coming from an accountant
Thank you for making my mind clear regarding LLCs I’m planning to start a business
I think we should meet
Hey there! Yes let's connect. Please reach out to my assistant at kirbi@markjkohler.com - thank you!
I feel like such a scholar to have traveled the financial business channels comments to discover this gem! The official connect of these two amazing channels. What a treasure 😀
You aren't paying self employment tax on side hustles if your w2 job maxes out your social security contributions.
This guy is awesome thank you 🙏🏾
Really good video, great content
I am learning so much with your video, thank you for taking the time and teaching me how to be more profitable.
Thank you for explanation. Im opening a construction business getting up to 8 million in funds. Before having an llc or anything I got a 150k contract signed. I called an insurance they told me itd be 50% cheaper on filing as a scorp and be 2 weeks faster to start up. I was worries if operating as an scorp would screw me on taxes looks like its the opposite.
Thank you 🏆
It would be a good idea to do a video explaining what to do when the SCorp has losses. (I haven't listened to it yet.) A video on calculating Basis would get watched a lot too!
SCorps are pass-through entities and losses flow thru to the W-2 pre-AGI
@@eoliverjdmba A ton of details you left out but yeah, that's what I would like to see a video on. But I'm praying we won't have income taxes at all after Jan 20th. :)
Mark where have you been all my life 😍 Your passion is going to help me be a profitable business owner
Should I just start with a s corp? If not at what money mark would I transfer
Great content.
I need the clean up system and In compliance
Agree with the video with one misleading exception. I don't think you need to be incorporated in the state you reside in to take advantage of the S Corp tax advantages. FICA is a federal tax concept. You have to pay your state taxes if applicable regardless of how you split income as w2 salary or distribution. So you could start a business in Wyoming as an LLC (taxed as a S Corp) to take advantage of the privacy and asset protection features. While that may not shelter you from state taxes if your business operates in another state, you should still be able to to exempt yourself from FICA for the S Corp's distribution income. (I think.) Please correct me if I'm wrong.
I think what he was saying was, proper planning prevents piss poor performance. Basically
Thanks for sharing Mark! What if we live outside the USA and are American. Does that change how we choose what state to have our business based in? I'll be watching and reading more of your content from now on. Thanks again!
wow!!!🎉🎉 Thanks so much Mark. Your awesome
Thank you
What is “ too much money” amount to switch from llc to scorp?
Great question. I’m wondering the same thing. I’m so torn on which one to get still bc the “amount” is never specified.
@@MiyaJeanLaroiiI worked for an accounting tax firm that did business taxes. Usually once a sole-prop/small business starts making about $40-50 thousand in Net Profit and we are there is going to be continuity……we start advising them to elect for the S-corp.
@@ogolden8315 Understood! So if you are not in the bracket of approx $40-$50 income, you shouldn’t consider the S-corp. Thank you!!
My business is an LLC taxed as an S-Corp. It saved me tons in taxes last year. But you say you must pay state taxes where you sit your butt in your seat. What if you are a military spouse and your home of record legally is elsewhere other than where you sit making your money. Per the Military Spouse Residency Relief Act, I should be able to maintain legal residence in the state where we used to live. My online business still operates out of that state. My EPA says this is okay per the Servicemember's Civile Relief Act. He says once we change our domicile with the military we will need to do the business state switch at that time. But now I worry after watching this video. This is all very hard to navigate when you move ever 2 years and have a successful business that you operate out of the home.
You should be fine. I'm in the military and my wife works in one state but get tax states from my home of record but I'm exempt from state taxes, so she pays no state on her employment and if she does we get it all back when we file taxes.
Thank you sir 🙏
Sir, I'm in the Los Angeles area, and I want to get a LLC. What office should I get in touch with?
KKOS or Mark J Kohler?
One more thing, for books that I want to put on Amazon and supplements.
LLC or S-CORP?
Hey do you have a team or connections in Philadelphia Pennsylvania specifically? Philly has a draconian and unforgiving tax system, so it must be a CPA in the city, not near, because you have to be a damn near expert to deal with the municipal system of Philadelphia. I imagine there are similar nightmares for small business in NYC, Chicago, LA, Phoenix, Miami.....you get the point.
That was a Priceless Dumb and Dumber statement starting @ the 4:45 minute mark :)
God bless you Sir
Very informative thank you! Does this all work the same way for starting a non profit?
I loved this 🎉 my concern is that I travel full time and although I have a home address, it’s really just my family’s residence and I don’t reside there. They usually forward things to my current addresses and I pay them for it. I don’t have an llc, I have so many financial boundaries bc of where my income comes from, I don’t even know where to start filing for a biz license. Help please?
Is it still beneficial for a single member LLC to elect S-corp tax status?
Thanku!
S-corp sounds great, what are the disadvantages of an S-corp to a LLC?
My accountant told me that my Scorp had to file as an employee of my own company. I’m confused.
1 big thing I have is what if I'm say oregon based and 80-90% of business or more is done here but I'm a roof and gutter cleaning business (to start add pressure washing window washing then more getting into minor construction even) do I then need another llc/s Corp in Washington and need to take sales tax and such there and can you go into this
Nobody has answered my question, though. I understand the tax breakdown of an s corp. However, when I open my LLC with my secretary of state. My next step is getting the ein#. Do I get the ein as an LLC or an S Corp?
You can a get a EIN in your own name.
But it would normally be best as a LLC.
Then later on you can choose how you would like to be taxed by the IRS.
You can “form” a S-Corp. S-Corp is just a method of taxation. LLC is an entity.
Partnership is an entity. INC is an entity.
So pick your entity. Most small businesses pick LLC.
Then you can decide how to be taxed.
-Taxed as Partnership LLC or sole prop
-Taxed as a S-Corp. Rule of thumb is about 50K gross for yourself then S-Corp would save you in taxes.
-Taxed as a C-Corp. Which normally reserved for larger companies. Public companies. Also can have adverse tax issues like duel taxations.
You will get an EIN as the LLC but then must submit Form 2553 to request to be an S-Corp. Form is found on IRS website and can be mailed in. It's actually quite a simple process.
Great video dude but ur lowkey had me laughing 😂
I’m excited to use these guys create my trifecta just put in an offer that was excepted for a business in Chandler Arizona going to create an S Corp.😅🎉
Got a cpa at my other 2 farm business
Also what about a say 25/75 ownership do we take that 37.5 and split that 25/75 than payroll of say 2 to start are a different category
All your info is SO great, Mr. Kohler. Thank you for everything you do here. I'm a single-owner Sub Chapter S Corp. I *think* I must take all of 2023's K-1 income, but I won't know what that is until into 2024 when all accounts are settled and my Accountant finishes December. But I heard that I must withdraw all my 2023 K-1 earnings in 2023. How is that possible with the reporting lag?
My accountant charges 1500 for a tax return, then if you have a business, an add-on charge of 2000 is required.
That’s what my accountant is charging too.
Is there a minimum amount you should make before you change to a s corp from a LLC?
My "SAUL".
do not change.
Not worth even opening up a business in the US, yet alone California...crazy smh
Do you know from experience?
Can I start with a Scorp instead of an LLC? I am starting my new business. I always hear that you need to do a LLC first and later Scorp.
Mark, I love the video. I do have one question though, I own a Wyoming LLC for my real estate because it can be anonymous when people look up the property. I believe Delaware is the same way, when you say different state LLCs don’t matter do you mean from a state tax perspective or just in general? Because there may be some qualitative reasons to be in some of these states from what I’ve learned. Let me know your thoughts if you see this, thank you!
what does k1 mean?
Googlable
Thanks for your video.
I live and pay taxes in Canada. Can I open a company in the US? Which state?
Thanks!
Do you need an LLC for property you own for 250K if it's your primary residence or only if it's a rental property?
Putting it in a revocable trust will make more sense if it's your primary residence and not a rental property.
AWSOMEEEEE
I FELT THAT ROCKSTAR TALKING TO ME 🤣😭
Where should I go to get a my first s.corp
Do you recommend an s corporation for a owner operator truck driver?
I am a truck driver myself and yes an S corporation is better
I need help!!😂😂
Couple questions say I’m starting a business that has to run for a few months then can get a higher certification and do more business with that cert, but if I change the the entity type I lose the cert and have to start over should I just start out as an s corp. also if I’m trying to start a business in ca but my license is in nv should my llc be in nv or in ca ? And if my llc is in nv can I register my city business licen in to that nv llc ? Or does the llc have to be in ca as well?
Is it worth changing my Regular LLC partnership for a S Corp. It will only make $1000
Buy $1,000 worth of bitcoin with that every year, and historically speaking, it will appreciate +/- 135%/year. Do the math on that while considering the $1,000 will depriciate ~7-14%/year and that $1,000/year is definitely worth it.
Are business loans from a 3rd party such as a lender guaranteed by me as a 100% shareholder in my SCorp contributions that can be added to my basis????
Only shareholder loans to an S Corp will give you “loan” basis (different than “stock” basis). In a partnership (the default treatment for a multi member LLC) you get debt basis for recourse debt and qualified nonrecourse debt.
What to do about about FinCin?
Should my holding company be an llc taxed as a c-corp and my operating llc be taxed as a s-corp? The operating llc is for my real estate interior design business. Thanks!
Stop making things difficult for yourself. Forget about holding companies and c-corps and all that crap. Get one entity that’s an LLC and start from there. Most importantly you have to make money before you can even think about these types of strategies. And even if you are making money, you rarely need holding companies. They provide no tax advantages unless we are talking about SEP retirement plans. They provide some asset protection, but not much else. Then you need to file two tax returns and have two sets of accounting books, which will cost you $1k in tax filings plus accounting fees. Stop making business so difficult.
Typically, you only need one LLC for your business (unless you have others with partners or multiple successful enterprises). If you have other significant safe assets outside of a retirement plan or real estate investments, that would be in a separate entity. Most have too many entities, but everyone's situation and risk tolerance differ. These guys in the video are great to follow and learn more from.
I tried calling but the call drops
Mark I need CPA who knows this stuffs.
We got you! Head to our Main Street Tax Pro Network who help clients nationwide and would love to help you - please get connected to one of them here: taxadvisornetwork.markjkohler.com/
Please note that once you make over $160,200, Social Security Tax is no longer applicable.
No, that's the cap. You still pay into the fund.
no you don't lol. perhaps you're misunderstanding. You will pay social security on the 160,000, but the money made past that won't. So let's say you made 200,000. 160,000 of that money will be taxed by social security while 40,000 will have no social security taken from it@@jimross2101
The annual SS wage base changes year to year, but the MEDICARE part is paid on every dollar of wages from $1 to infinity.
🔥🔥🔥
At what amount earned I need to transition to the S-Corp?
750,000/13,000,000=0.057 which is 5% salary.
Gold
S-corp requires more accounting and reporting however if you are paying yourself more than $80k per year it is worth it
Love you guys and all your content, but the new video clips and animations and stuff are SO distracting it's hard for me to watch... 😢
This video is literally word for word the same as others on the same topic....
But s Corp in NYC, you pay 8.85% NYC general corporation tax?
12:35
I have a LLC business without employees (providing design services) with Scorp Status. I pay myself and get a W2. My partner is retiring and removing himself as a member leaving me as a single member ownership. I plan on revising members to include my spouse with 51% (me), 49% (spouse). Spouse and I also have an LLC with an S-corp election status for a rental company (50/50 member split myself & spouse). I know I know, it shouldn’t be an scorp!. We have not used the LLC yet because we have not purchased a rental yet (in the works though). Planning on reversing the S-corp election on that LLC before acquiring a rental and quitclaiming property to the LLC. Am I on the right path here….?!?!
Terminating the S election would typically result in that LLC then becoming a “C” corp. just save or scrap that LLC and incorporate a new one and LEAVE it as a default partnership if the intent is to hold real estate in it.
You said you have an LLC, but pay yourself and get A W2. Are you saying you give yourself A W2? Because you can't do that an LLCs is a pass-through for taxes so your just creating more taxes.
@@brewdog8568 You're wrong. If an LLC makes an S-election, an owner-employee is actually REQUIRED to draw a W-2 salary for reasonable compensation. And they're not creating more taxes, they're lessening them. The remainder of the profit the LLC earns escapes payroll taxes (SS/Medicare) as the owner's distributive share is no longer subject to SE tax as it otherwise would have been had the LLC remained taxed as either a disregarded entity (if owned by a sole member) or a partnership if multi-member. Also, @laurak9472 terminating the S-election is considered a taxable event. If there's no appreciated property within the LLC yet, likely not any concern. I'd recommend discussing with your CPA first (or finding one if you don't already have one...) before you do anything. It might be worth closing that LLC and just starting a new one. Again, discuss with your CPA and possibly attorney too.
@craigkish8522 I no that. They made it sound like they where paying a w2 our of just an llc. Or I understand what they said wrong
H&R Block and other chain tax “professionals” are sooo useless. Thanks Mark
I have two commercial rental properties and both are currently LLC's. Is it possible to file for "S" Corp status for 2023 and can this be done now before the end of 2023 or do I have to file it for 2024?
Using joe biden as an example is like using hilter as a saint ‼️🤣😂
what about us who use a w-8 ben form? those of us who got out of the corporation called "UNTIED STATES" !!
Mark, for the love of god can you please explain to people that they need an accountant before they think they can just file to be an scorp. It’s astonishing how many business owners don’t have an accountant and they watch some trash videos online by individuals who have no knowledge on taxes or accounting and they do everything wrong.
In Florida, Realtors can’t incorporate as an Scorp. Only LLC. Can I just file as llc and elect to be taxed as scorp?
@@RichAyers yes. Don’t worry about incorporating. It’s no difference than starting an LLC. Then elect to be taxed as an scorp. LLC is a business structure/entity and scorp are not business entities. An scorp is a tax election created by the IRS.
Let me know if you need help. I’m in the Florida area as well. St Pete to be exact. I have my own accounting and tax firm. We can swap contact info if you’re interested.
@@unbelievable9750I'm a handyman in St Pete. I'm looking for a good accountant to help me get all my deductions. I'd love to meet up and chat.
You save 50% on self employment taxes through an LLC?
Thanks!