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View Full Version : SMLLC vs S Corp, and mid-year filing



FishWine
07-18-2015, 01:34 PM
Small but successful restaurant here. Last year I paid myself salary and filed as SMLLC - thinking I probably paid more taxes than necessary. Although it is late in the year, I am researching converting to an S corp, and since I am already paying myself a reasonable salary, and be able take dividends of profits. I think this will be better for tax purposes among other reasons. Am I missing anything here?

Chris_Tax
07-21-2015, 03:58 PM
You will find out that the worse tax for a small business is the social security tax for a sole proprietor. An S- corp will allow you to share profits with a K-1 and you will not have to pay social security tax on it

taxcpa
07-24-2015, 09:53 AM
This is what Chris-Tax is mentioning: http://www.newcompanyinfo.com/save-taxes-with-an-s-corporation

JoshuaJ
07-27-2015, 04:50 PM
You will find out that the worse tax for a small business is the social security tax for a sole proprietor. An S- corp will allow you to share profits with a K-1 and you will not have to pay social security tax on it

You can definitely have a lot more benefits with an S-corp.

Zeeka
02-14-2019, 06:15 PM
Looking for some advice as i have researched online and watched many videos trying to understand the difference between an S Corp and LLC. So far my understanding is that if you have a single member LLC then you file your taxes on an individual return and you pay self employment on all the net income and the profits (if any). If you have a S Corp, then you pay the Self employment tax only on the salary you take and NOT on the profits/dividends. Is this right?
If so then why do most people recommend opening an SM LLC and then later converting it to S Corp? Why not just start up with an S Corp, if eventually you will need to convert it into S Corp for tax benefits. Would really appreciate some advice here as i am terribly confused.
I am thinking of opening a business in NYC as a single member. I expect the net yearly income to be not more than 40k. Should I open it as a LLC or as an S Corp?