💰 S-Corp

💰 The 5 Reasons Why Self-Employed Professionals Incorporate Their Business

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The 5 Reasons Why Self-Employed Professionals Incorporate Their Business:

Replay Link:

https://formationscorp.webinargeek.com/watch/NAMKlmw-1TjBRDzU7gouuK_dgQABHS0eBfy-ZgxwOt0/ (11/09/22)

Net Income is Not That Simple:

Gross Income – Expenses (Write-Offs) = Net Income

Expenses & Write-Offs:

Business Use of Home & Utilities

Books, Literature & Education

Professional Services & Consultations

Cel Phone & Internet

Insurance

Supplies & Gifts

Business Meals

Vendors & Contractor Fees

Vehicle Mileage & Transportation

Equipment & Software

Self-Employed Professionals Deal with Financial Stress (Sole Proprietor or LLC):

CPA

15.3% Tax

Budgeting

Bookkeeping

Quarterly Tax Payments

Expense Tracking

Health Insurance

401K

5 Reasons Self-Employed Professionals Incorporate:

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💰 Beginner’s Guide to Running an S-Corp

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Beginner’s Guide to Running an S-Corp pdf:

Beginners-Guide-to-Running-an-S-Corp-110822

Will You Save Money By Forming an S-Corp?

Formations Calculator: Link

What is the S-Corp?

What is the S-Corp? Link

As an “S corporation,” you gain some of the benefits of a corporation while remaining self-employed.

An “S-Corporation” is a filing designation with the IRS that “elects” to file your LLC as a “sort of” corporation; this means that you can still function as an LLC (which is a pass-through entity, more on that in a bit) but also gain some of the benefits of a corporation.

What is a Business Expense?

What is a Business Expense? Link

💰 When NOT To Have Your LLC Taxed As An S-Corp

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When NOT to have your LLC taxed as an S-Corp

1. How Much Profit Should You Be Earning Before the S-Corp Election Makes Financial Sense:

Detailed video discussing when an S-Corp makes financial sense:

When does an S-Corp make financial sense for your business?

2. How Large Amounts of W-2 Income Can Negate the Tax Savings of An S-Corp:

Detailed video discussing W-2 and small business income:

What happens when you have a business and a W-2 job? Does S-Corp still make sense?

3. What Happens When Your State Doesn’t Recognize the Federal S-Corp:

Minnesota recognizes the Federal S-Corp: Link

If you filed federal Form 2553 with the Internal Revenue Service (IRS) to elect to become an S corporation, you do not need to file a similar form with Minnesota. Minnesota automatically accepts your S corporation status once approved by the IRS.

Detailed video on cities and states that tax S-Corps:

Does your state or city tax S-Corps? If so, does it still make sense?

4. Why Passive Income, Such As Buy and Hold Rental Real Estate, Should Not Be Taxed As an S-Corp:

Detailed video on how passive income is taxed:

Why rental property income should not be in an S-Corp

💰 5 Reasons You Want to Be An S-Corp

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5 Reasons You Want to Be An S-Corp

1. You Will Pay Less Taxes:

We all have to pay personal income tax. However, as an LLC, you will pay an additional 15.3% self-employment tax on top of that for any net income that you have for the business.

Once you turn into an S-Corp, and become a payroll employee of your own business, some of your self-employment taxes just dissolve. Simply by shifting half of your self-employment tax liability to the business as an expense, instead of treating it as an income, you get a lower tax rate.

You also won’t have to pay the big quarterly tax payments, since as an S-Corporation, most, if not all of your tax liability, is held every month through your monthly and even quarterly tax withholdings.

2. You Get Amazing Benefits:

Check out Formationscopr.com/blog regarding this.

By running your health insurance and retirement benefits through your S-Corporation company payroll, for yourself, you knock down your net income considerably, and at the same time, create more tax savings, through the form of deferred compensation and 401k.

3. You Protect Yourself:

As an S-Corporation, this division between your personal finances and business activity gets set in stone. Being an S-Corp is a signal to the state and federal agencies that your business is a fully-fledged entity that should be treated as different from other personal financial activity, further protecting you from audits, legal judgments, and other things that might occur.

4. You Earn Credibility:

A corporation is a more trusted source for commercial activity these days than an individual. By becoming an S-Corp that is registered and licensed by state and federal authorities, you are communicating you are a serious business with real services to offer.

5. You Are Less Likely to Get Audited:

As an S-Corp, you are 4000% less likely to get audited by state or federal agencies than a Schedule C. Such a reduced risk simply by filling 2553 form and properly managing your S-Corp financials.

💰 S-Corp Indices

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  1. 💰 5 Reasons You Want to Be An S-Corp (08/26/20)
  2. 💰 When NOT To Have Your LLC Taxed As An S-Corp (11/16/20)
  3. 💰 Beginner’s Guide to Running an S-Corp (11/08/22)
  4. 💰 Questions to Ask During My Meeting (Protected) (11/08/22)
  5. 💰 The 5 Reasons Why Self-Employed Professionals Incorporate Their Business (11/09/22)
  6. 💰 LLC vs S-Corp (08/14/20)
  7. 💰 S-Corps and Self-Employment Taxes (09 Mar)
  8. 💰 10 Frequently Asked Questions About Business Expenses (28 May)
  9. 💰 Business Use of Home (18 April)
  10. 💰 Formations Business Spread Sheet with Home Office and Auto (11/18/22)
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