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4 Replies Last post: Jul 20, 2009 6:27 PM by bm911tax

Changing from LLC to S-Corp

Jul 29, 2008 10:33 AM

Click to view dhnkle2's profile Start-up dhnkle2 2 posts since
Jul 29, 2008
My business has been in existence now for 3 years and we have been fairly profitable. Last year we paid out a lot of money in taxes which I found out that could have been prevented if we were S-Corp instead. If we had filed or still do file the form to claim taxes as an Scorp (being an llc) would this save us money instead of actually changing our business entity?

Our accountant really didn't help with this process so we are searching for another one, but in the mean time I need to know which option is the best way to go. We are a small manufacturing company in Indiana and any help you give is most appreciative.
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Click to view LUCKIEST's profile SCORE LUCKIEST 7,942 posts since
Aug 6, 2007
1. Re: Changing from LLC to S-Corp Jul 29, 2008 12:38 PM
Changing from LLC to S-Corp, Welcome

I have some great suggestions How do I get in touch with you??

Send me an email to " pdeig@juno.com " and maybe include a phone number.

LUCKIEST
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Click to view dhnkle2's profile Start-up dhnkle2 2 posts since
Jul 29, 2008
2. Re: Changing from LLC to S-Corp Jul 29, 2008 12:44 PM
in response to: LUCKIEST
Thank you luckiest. My email address is dhnkle2@yahoo.com. I look forward to hearing your suggestions.
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Click to view Bridge's profile Mogul Bridge 364 posts since
Jun 3, 2008
3. Re: Changing from LLC to S-Corp Jul 30, 2008 1:22 PM

I got lost - are you currently an LLC or corporation?

Technically, the IRS does not recognize the LLC classification. If you are a LLC, the IRS automatically reclassifies you as another type of entity for tax pupposes.

What type of LLC are you; i.e. single member, 2 members, multiple members? This will determine how the IRS has classified you.

Greg
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Click to view bm911tax's profile Mogul bm911tax 64 posts since
Jun 30, 2009
4. Re: Changing from LLC to S-Corp Jul 20, 2009 6:47 PM

You are on the right track. An S corp can save you lots of $$ on taxes (if properly structured of course). You can reclassify your LLC to be an S corp without changing your current state LLC structure. You will need to file 2 forms with the IRS. Form 2553 and 8832. Then you will need to get into the payroll and start compensating yourself for the services and pay yourself reasonable salary. (yes filing quarterly payroll returns, and W2 year end will be required) You can then get the into qualified retirement plans and accountable plans for S corp and of course the distribution that is not subject to SE taxes (a big savings)

Best of luck,

Ben.

http://taxbizpro.com/

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