800-371-1439
WHITEWOOD SOLUTIONS
BUSINESS ENTITY FORMATIONS
WHY BECOME TAXED AS AN S-CORPORATION?
-
S-Corps Provide Liability Protection just like a Limited Liability Company (LLC)
-
Only the money invested in the S Corporation by its shareholders is at risk, barring extreme circumstances. Personal assets are usually protected, as they are with LLCs
-
S-Corps Are Not Taxed…Only The Shareholders. In other words, if you have four partners and your S-Corp made $40,000 this past year, you’ll each claim $10,000 in taxable income from your S-Corp. While your S-Corp will need to file an IRS 1120 S form, S-Corps are “pass-through” entities, much like an LLC
-
S-Corps Appear More Legitimate in many people's mindset so it helps your business grow. Investors often view the corporate structure as more permanent than that of an LLC
-
S-Corps Can Sell Stock. To raise capital, corporations often sell stocks. LLCs can only sell interests in their company
-
S-Corps Can REDUCE Your personal annual tax liabilities
BASIC TAX RELATED BENEFITS:
-
No more Self-Employment Tax is paid as on a Schedule C of a 1040. This is a 15% SAVINGS alone when compared to filing a Schedule C on your personal 1040
-
Pay FICA and Medicare taxes on your “reasonable” salary ONLY which will be much less than paying 15% on the NET Profit of your business as you do when you file a Schedule C
-
All other profit is “passed-through” to your personal 1040 and taxed as normal income
