On January 22, 2011 at 12:28, vwpower44 said...
The tax liability for and s-corp is smaller if you don't make a ton of money. If you make a ton of money, then it is actually better to be taxed as a separte business entity. For example if you make less than $244k with you salary and business profit, then it's better to an s-corp (less taxes). If you make more than $244k then it's more beneficial to be an LLC (Less taxes). At least this is what our accountant tells the owner.
This is wrong:(
Sounds like a story regurgitation that missed the accuracy mark
S Corps will pay unemployment on owners - LLC Not
S Corp can skate on a bit of FICA - LLC Not
If you own more than 20% (I think) you'll pay income tax on health insurance
LLC will pay regardless of %
The key will be, "Do you make more than a typical person in your position?"
By that I mean, you own 100% of the company. Do you make what is typical in your area for a lead tech - say $45K. Or do you make significantly more?
If its way more, than go for S Corp. If not, go for LLC.
As an S Corp, you MUST pay yourself, weekly, a salary for a typical person acting in your capacity. If an average tech in your area makes $45K a year, you must pay yourself weekly based on $45K a year. If you're only making $50k, this may be almost impossible so LLC is the way to go.
