Benefits of S-Corporations
Making over $60,000...and NOT an S-Corporation???
If YES...then you MUST keep reading!
Let's start with why...an S-Corporation likely will SAVE YOU TAXES!!
But first...let's back up and give some more information.
Many people often mistakenly think that an LLC...
...will save them taxes...
...people think when they have NO entity (a Sole Proprietorship)...they should switch to an LLC and that will save them taxes...
...WRONG!
Sole Proprietorship vs LLC
Tax Treatment = Identical
Asset Protection = Different (consult a lawyer in your state for those differences)
If you are looking for a business entity to save you taxes???
Converting an LLC into an S-Corporation...
...will likely SAVE you TAXES!!
How does it save on taxes?
If an S-Corp is right for you...it REDUCES an expensive tax...often the silent killer for entrepreneurs....
...Self-Employment Taxes!
Now...we need to address a major concern I hear when discussing this strategy:
"It's too complicated!"
The problem with that statement is this...
...it's NOT wrong.
There ARE a few steps involved.
However, if you are working with a Tax Advisor that will do 2 Important things:
Help you Establish the S-Corp
Help you Implement all the procedures required by IRS
Unfortunately, I often see accountants...just do Step 1.
Resulting in clients that are confused and/or at running afoul of IRS rules.
I will not dive into the procedures in this email...because it will complicate the subject matter.
The main point here:
If you made more than $60,000 in PROFIT in 2022...
...than you MUST consider an S-Corp...
...ASAP!!!
I am purposely sending you this in January 2023...
...the deadline to establish an S-Corp is March 15th!!
It could save you thousands in tax liability!!
Still not convinced?
S-Corps are audited about 50% less than "regular LLCs!"
Discuss this with your tax advisor NOW!!
Want more info on S-Corps?
I did a full podcast episode on this topic.
Listen to podcast Episode 21: Build Your Wealth Muscle HERE!
Best
Pat
Disclaimer: This is meant to be educational ONLY. This is NOT advice for your financial or tax situation. We are NOT lawyers and this was NOT legal advice. Please consult a qualified tax, financial, or legal professional for your specific needs.