Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
advice on LLC files status S corp
Old 08-10-2014, 12:17 PM   #1
Recycles dryer sheets
 
Join Date: Aug 2009
Location: palm bay , FL
Posts: 100
advice on LLC files status S corp

Kinda took my eye off the tax implications this year, big jump in income. I am self employed, a contractor that gets 1099 statements. My question is, is it too late in the year to become an llc, and then set it up to file as an s corp, and have all the years income attributed to s corp even though checks todate have been made out to me. If not, then I will just hope same good fortune next year and then be on top of it. My goal in this move is to shelter several 10's of thousands of dollars from Social Security tax. Yes i know i have to pay myself a reasonable rate.
thanks for any help.
__________________

__________________
perrytime is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-10-2014, 12:34 PM   #2
Recycles dryer sheets
 
Join Date: Aug 2009
Location: palm bay , FL
Posts: 100
well no sooner did i post this than I searched the web with a different question than i had been doing, and seems the answer is no. Form 2553 needs be filed early in year.

Sound right?
__________________

__________________
perrytime is offline   Reply With Quote
Old 08-10-2014, 01:40 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
I would think the transaction dates would have to be after the incorporation dates to survive an audit. But really i do nit know, i would ask my accountant, and suggest you get one if you plan to form the llc.

Fwiw, i co-own a llc-s with my wife and shelter the 25% that you are speaking of. Unless you are meaning profit/k-1, we don't recognize much profit.


Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 08-10-2014, 01:57 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,295
It is not profit that you are sheltering.... you have to recognize the profit of the Sub S in your personal tax return anyhow....

I think what OP is trying to shelter is SS and medicare taxes..

S corp FAQ: How much tax can S corporation save shareholders?


The thing that you have to remember is to pay yourself a reasonable salary... that is where most people mess up with the IRS... you cannot make $200K in profit as the only employee of an S corp and decide to pay yourself $10K... but, if you want to play the tax audit roulette, go right ahead... you might win.....
__________________
Texas Proud is offline   Reply With Quote
advice on LLC files status S corp
Old 08-10-2014, 02:31 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,035
advice on LLC files status S corp

You can absolutely avoid FICA (~15%) by recognizing profit. Also by company matches contributions.


Sent from my iPhone using Early Retirement Forum
__________________
dallas27 is offline   Reply With Quote
Old 08-10-2014, 06:11 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,295
Quote:
Originally Posted by dallas27 View Post
You can absolutely avoid FICA (~15%) by recognizing profit. Also by company matches contributions.


Sent from my iPhone using Early Retirement Forum

Not actually sure what you are trying to say... I had said that you could avoid FICA... but not shelter profits... which is true...

I assume that the matching is related to a 401(k) that the corporation might have... that has nothing to do with a Sub S... you can get the same benefit with a Sub C....
__________________

__________________
Texas Proud is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Full Time Employee with Side LLC Business - QUESTIONS RockSplat Young Dreamers 4 10-18-2008 09:37 AM
Doesthis make financial sense? "LLC" info needed thefed FIRE and Money 7 01-27-2008 10:48 PM
land trust/LLC/homestead exemption illfittingshirt Other topics 4 05-14-2007 11:09 PM
LLC vs S-corp thefed Other topics 5 12-20-2006 09:34 PM
iCapital LLC Bruce FIRE and Money 0 09-21-2006 07:15 PM

 

 
All times are GMT -6. The time now is 02:42 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.