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5 Replies Last post: Jan 22, 2009 5:50 PM by Creditbuilder

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LLC S-CORP help

Jan 10, 2009 12:10 AM

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GQnine44 2 posts since
Jan 9, 2009

Hello-

I am new to this forum but have learned a great deal by reading.

Here is my scenario...

I formed a single member LLC here in Ohio with the help of an attorney about 5 years ago. Last year we had a great year and I paid a LOT of self-employment tax. My accountant wants me to disolve my LLC and form an S-Corp. I really dont want to go through the trouble and expense of this so I began searching for alternatives. I thought that there was a way to designate an LLC as an S-Corp so I began searching and found information about IRS form 8832. I called my lawyer and he didnt seem to have a clue about saving taxes by designating an LLC as an S-corp. My accountant doesnt seem to really know either (she just wants me to start a new S-corp). Am I surrounded by idiots or what? Can someone please set me straight on LLC taxes and how I can save self-employment tax? I already take a paycheck. I realize my salary has to be reasonable. Can I keep my LLC and save? Thanks in advance for all your replies.

Tags: s_corporation, small_business, llc_filing, taxes, taxation Report as inappropriate

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LUCKIEST 7,926 posts since
Aug 6, 2007

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1. Re: LLC S-CORP help Jan 10, 2009 6:17 AM

LLC S-CORP help, Welcome

WHO ARE YOU?? Go to Members page and share some info

If as you say "YOU ARE SURROUNDED BY IDIOTS" get yourself a new Accountant and Lawyer.

It is hard to give GOOD advice without the whole picture.

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Mogul

dublincpa 165 posts since
Jan 29, 2008

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2. Re: LLC S-CORP help Jan 13, 2009 11:38 AM

From what you have said, you are on the right track. File the 8832 AND 2553 by 3/15/09 to be effective January 1, 2009.

If you have someone familiar with the rules, you might even be able to file the elections late to be effective 2008 by March 15, 2009 depending on your circumstances. However, if you did not pay payroll taxes or prepare a W-2 for yourself this may be a challenge. However if you act prior to 1/15/09, there may be a chance.

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GQnine44 2 posts since
Jan 9, 2009

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3. Re: LLC S-CORP help Jan 13, 2009 11:56 AM

in response to: dublincpa

Thanks dublin, I actually did pay myself payroll in 2008 so I should shoot for the 2008 election. I guess it doesnt hurt to try - the worst they can do is turn you down right?

It does go to show that you do have to research on your own and not just believe what the first attorney told you.

Are you in Dublin, Ohio? Do you know of anything specific in Ohio that I should be aware of?

Also, after more reading it appears that you no longer have to file form 8832. It looks like 2553 does the job of both. Is there a state issue that requires filing both forms? THanks for your help!

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rjc2324 16 posts since
Jan 8, 2009

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4. Re: LLC S-CORP help Jan 22, 2009 3:37 PM

in response to: GQnine44

I would say that you need a better CPA. You can file just the 2553 (no 8832 necessary) for the S-election. An S-election is simply a tax treatment (tax entity) just like and LLC is simply a state legal entity. There is no additonal paperwork needed at the state level to qualify or for administration purposes. You could easily still do the s-election under Revenue Procedure 2007-62 that allows the S-election to apply retroactively to 2008. Provided that you meet the requirements of that Rev. Proc. you could potentially save some payroll taxes still.

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Mogul

Creditbuilder 134 posts since
Jan 17, 2009

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5. Re: LLC S-CORP help Jan 22, 2009 5:50 PM

I am no lawyer or tax accountant and all my companies are llc's with the exception of one which in a C-corp. Stay with the LLC is my advice, because even if you are paying a few dollars more in taxes, it is much better of a structure for asset protection then an INC, especially an s corp..

hope that helps.

for more info see.... www.businessformationgroup.com

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