Accounting News and Notes

LLC’s can Legally Convert to an S Corporation Saving Thousands Annually

LLC’s came in vogue approximately fifteen years ago when the the state of Georgia enacted legislation allowing both LLC’s (Limited Liability Company’s) to be established. Although the LLC does allow for some greater flexibility and ease of operation it often results in a higher tax obligation that might have been incurred if the business is an S Corporation.

Tax law treats all the earned income from an LLC as being subject to both FICA & Medicaid taxes whereas an S Corporation has to pay these taxes reflected on W-2’s. Tax law allows an LLC to legally convert over to being an S Corporation, for tax services,  as long as all active employee/owners pay their-selves a fair and reasonable salary. This number is best determined by the facts, position, and profit of a business and the truest test of this calculation is what a business owner would have to pay someone else to perform their position.

We offer a free initial consultation to see if converting your business to an S Corporation for tax purposes makes sense to you. Put our decades of experience to work for you ensuring you pay your lowest legal possible tax.

To read more and see which entity type is best for you visit http://www.hiscpa.com/article2.html

We serve clients that are located in Atlanta GA, Gwinnett County, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, and Beyond.

Related posts:

1. Should You Incorporate; Being an S Corporation Can Save Thousands Annually
2. Gwinnett CPA on Whether You Should Incorporate Your New Georgia Business or Convert Your LLC to an S Corporation for tax purposes
3. Atlanta CPA Advises on Whether Your Georgia LLC Should Convert Over to an S Corporation for Tax Purposes
4. Atlanta CPA on How a Georgia LLC and Legally Convert to a Georgia S Corporation for Tax Purposes
5. Atlanta CPA on Determining if You Should Convert Your GA LLC Over to a GA S Corporation

This entry was posted on Wednesday, May 7th, 2008 at 10:39 am and is filed under Atlanta Corporate Income Tax & S Corporation Return, Incorporating in Georgia & Entity Selection.
Tags: How to Convert Your LLC to an S Corporation for Tax Purposes, IRS Form 2553, Small Business Election. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.