Accounting News and Notes

Atlanta CPA on Should You Convert Your New Georgia LLC to an S Corporation for Tax Return Preparation Purposes

Tax law has long allowed an LLC to legally convert over to an S Corporation for tax purposes. Although being an LLC offers some flexibility (no Board of Directors/ease of formation), being an LLC will typically result in many businesses paying an higher tax bill on its earned income as all of an LLC’s net income are subject to FICA and Medicaid taxes.

For an LLC converts to an S Corporation for tax purposes, it stays an LLC for all other issues, such as contracting, licensing and with the Secretary of State,  thus maintaining the advantages initially desired. When a business converts over to an S Corporation all active employee/owners are required to take a fair and reasonable salary, given position and profit. The best test of a reasonable salary is what an owner would have to pay someone else to perform their position and it is a function of their position, responsibilities, and the business’s profit. When an LLC converts over to an S Corporation for tax purposes its federal and state income taxes will remain essentially the same. An LLC pays FICA & Medicaid taxes on all of its net earnings/earned income whereas an S Corporation will be obligated solely on its reasonable salary or an owner’s W-2 wages.

The IRS has long had an established system for converting an LLC legally over to an S Corporation for tax purposes for which we are intimately familiar. Each and every tax situation is unique and I would welcome meeting with you to discuss.

To learn more visit:

Choosing an Entity Type for Your New Georgia Business
Your initial choice of entity is perhaps the most important tax, financial and legal decision you might ever reach. Being well versed in these areas is essential to a wise and prudent decision. See http://www.hiscpa.com/article2.html

 Determining How Your New Georgia Business Will Be Taxed: Effects of Entity Choice
Carefully considering the tax effects of your entity choice is essential to getting your business off on the right foot. Being careful to avoid, if at all possible, the double taxation of C Corporations and then selecting the right entity for your business from both a tax and legal perspective is critical. Visit http://www.hiscpa.com/article2.html

Getting Your New Georgia Business Started
Understanding many of the basics of the start of the incorporation process will do much to ensure that you are well-versed and able to make wise and informed decisions. As these issues will affect your business operations and finances during the lifetime of your business they are essential to getting started well. Go to http://www.hiscpa.com/incorporating-guide.html

Determining Where Incorporate Your New Geogia Business
The decision of where to incorporate your business is a critical component of getting your business started. Learn what you need to know to make a well-informed decision. See http://www.hiscpa.com/incorporating.html

 Gerogia Corporation Forms and Registrations Checklist
Whether you are just incorporating or have been in business for years. This summary will enable you to quickly locate the forms and guidance you need to ensure your business maintains tax compliance. Visit http://www.hiscpa.com/checklist.htm

Incorporating Your Issues for Your New Georgia Business Leadership

Knowing who will lead your business, their morals, beliefs and work ethic are essential to success in your new business venture. Determining who should be at the helm and who should follow will do much to avoid needless delays and time lost in aimless decision making. http://www.hiscpa.com/business-leadership.html

Incorporating the Details for Georgia Business Owners
Learning the basics of incorporation will do much to ensure that you do not make a costly mistake. Discovering the details of what all is involved in your new Georgia business will much to ensure you avoid costly mistakes and blunders. http://www.hiscpa.com/incorporating-details.html  

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!   

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved)  

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

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