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6 Replies Last post: Apr 28, 2008 4:49 PM by nytaxguy

Which one is better? LLc or S Corp

Jan 15, 2008 12:45 PM

olas01 4 posts since
Jan 8, 2008

Hello,

I just started my own business, like 4 months ago, and i get for S corp form; 2 days ago i received one letter from maryland tax that mean i have to do my return tax, how can i do because i did't sell too much? i make too much expenses for open that business i use my money, do you think i can put this expenses when i do the business tax return? yes or no? if no why? so what can do if i want do the tax return? remember i use my money for started that business! do you think i can lose my money? because i can do the tax return together with my business.

Somebody told me i have to switch for LLC, and now i can put all expenses i do it for open that business!

I need some help please, thanks you for your response

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LUCKIEST 7,912 posts since
Aug 6, 2007

1. Re: Which one is better? LLc or S Corp Jan 15, 2008 12:57 PM

01. It is the American way. Anybody who is in business must file some kind of Tax Return.
You received a letter from the State. You usually have to file a FEDERAL tax return with the I R S first.
It makes difference an LLC or S Corp, you will have to file RETURNS . Makes no difference if you make money
(profit) or have a loss, the returns MUST be filed. Go see an accountant.
LUCKIEST

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DomainDiva 1,727 posts since
Oct 10, 2007

2. Re: Which one is better? LLc or S Corp Jan 15, 2008 1:01 PM

Stop listening to amateurs. Get an accountant. You have to file a tax return regardless of the corporation status yuo have elected.

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intechspecial 1,455 posts since
Jan 6, 2008

3. Re: Which one is better? LLc or S Corp Jan 15, 2008 2:18 PM

in response to: DomainDiva

As per advice of a business advicer there are good and bad to each.

A LLC limited liability company, is just that, it has limited liability.

So I would have to say an LLC is the better until you are better established.

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LRushforth 1 posts since
Jan 22, 2008

4. Re: Which one is better? LLc or S Corp Jan 22, 2008 9:41 PM

You really need to ask two questions. First: "Which is the best entity for legal reasons?" This will usually depend on the optimal protection for the business and for company's owners under state law. Second: "Which is the best entity for tax purposes?" This will depend on state and federal tax law and how those law apply to the company's financial situation.

For many folks, the answer is to form an LLC that elects to be taxed as an S corporation. In other words, a business can be an LLC under state law that the IRS treats as an S corporation for federal tax purposes. Under federal tax law, there is no tax law that applies to an LLC specifically. An LLC is taxed as one of the following: (1) a sole proprietorship (if it has only one member); (2) a corporation under Subchapter C (normal corporate taxation); (3) a corporation under Subchapter S; (4) or, as a partnership (if it has two or more members). The legal question should be answered by an attorney familiar with your business and applicable state law, and the tax questions hould be answered by an accountant that is familiar with your business and applicable tax law, both state and federal.

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olas01 4 posts since
Jan 8, 2008

5. Re: Which one is better? LLc or S Corp Jan 22, 2008 10:45 PM

in response to: LRushforth

Thanks you so much for answer i really appreciate your response and i feel better now, i'm not confuse any more.

sincerely,

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nytaxguy 15 posts since
Apr 28, 2008

6. Re: Which one is better? LLc or S Corp Apr 28, 2008 4:49 PM

in response to: LRushforth

In NY and, I presume most other states as well, the manner you elect to report for Fed (Sch C, 1065, 1120S or 1120) holds for both Fed and NY. incorporating as an LLC does not determine the tax reporting method.

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Which one is better? LLc or S Corp

Jan 15, 2008 12:45 PM

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