Duluth/Gwinnett CPA: LLC’s can Legally Convert to an S Corporation Saving Thousands Annually
LLC’s came in vogue approximately twenty years ago when 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
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