Per IRS regulations, you do not need to take salary in case of an LLC. But whether you take salary or not, there will not be any tax effect as all of your income whether salary or otherwise, will be subject to self employment tax. That is why I always suggest most of my clients to form an S corp. In most cases for small businesses, S-Corp. is better than LLC. In case of LLC, 100% of net income is subject to self employment taxes (15.30%) while in case of S-Corp., the income subject to self employment tax is typically 30-50% of net income. I have illustrated this and the tax saving impact, on my website with the help of an example. Please see "FREE DOWNLOADS" page on my web site www.Gupta-CPA.com and download the excel file, review and give me your feedback, if any.
Hope it helped.
Running a small business is no small feat. That's why we've created a small business forum for expert insight, insider tips and the industry knowledge you need to see your small business grow.
Join our small community for expert insights, insider tips, and the industry knowledge you need to see your small business grow.Get Started Become A Member
Running a small business is no easy feat. That's why we've created a forum for small business ideas, insider tips and the industry knowledge you need to help your small business grow.
Now that you’re a member of the community, spice up your profile by adding photos, a custom avatar, information about your small busines, and much more.View Profile
Take part in the conversation and post your own question to the community.
Ways to Make Your Search More Accurate
Most of the time, you just want to find content that has a particular phrase. Here are the easiest ways to find the content you want.