PENSACOLAFLTAX.COM
  • Home
  • QuickBooks Accounting
    • Payroll Processing
    • Accounting
    • Bookkeeping
    • QuickBooks Services >
      • QuickBooks Set-up
      • QuickBooks Training
      • QuickBooks Tune-up
      • QuickBooks Hybrid Bookkeeping
    • CFO Services
    • Non-Profit Organizations
    • Security
  • Income Tax Services
    • Virtual Remote Tax Service
    • Business Tax
    • Personal Tax
    • IRS payments and Problem Resolution
  • Blog
  • Contact
  • New Business Formation
  • Q&A
  • Home
  • QuickBooks Accounting
    • Payroll Processing
    • Accounting
    • Bookkeeping
    • QuickBooks Services >
      • QuickBooks Set-up
      • QuickBooks Training
      • QuickBooks Tune-up
      • QuickBooks Hybrid Bookkeeping
    • CFO Services
    • Non-Profit Organizations
    • Security
  • Income Tax Services
    • Virtual Remote Tax Service
    • Business Tax
    • Personal Tax
    • IRS payments and Problem Resolution
  • Blog
  • Contact
  • New Business Formation
  • Q&A
Search by typing & pressing enter

YOUR CART

McVay Business Services - Accounting & Tax Services Pensacola, FL

2/3/2019

Benefits of Forming or electing your LLC an Sub-S Taxation

Picture

Benefits of Forming or electing your LLC an Sub-S Taxation

Entrepreneurs have a couple choices when deciding what to file their new business as. And it’s important to do the necessary research to make the best decision for you and your business. One of those options is the S Corporation.
First of all, what is an S Corporation? An S Corporation, or an S Corp, received its name from subsection S of the tax code. To start an S Corp, a small business owner simply forms a C Corporation then files for S corporation status with the IRS. While an S Corporation and a C corporation have some similarities, the two have differences when it comes to regulating pay and self-employment tax regulations.
Mike McVay, LLC & S-Corporation Specialist - 850-725-5696

Here are the top three benefits of forming an S Corporation:
They have Pass Through Taxation like an LLCLike an LLC, an S Corporation doesn’t pay corporate taxes. Anything made or lost is reported based off of the personal income taxes of the business owner’s. As a result, this avoids the double taxation that C Corporations have to put up with. Since net losses are also passed through, the shareholder can reduce his tax liability by counteracting other income with any losses from the S Corporation. There is an important caveat however: any shareholder who works for the company must pay him or herself reasonable compensation. Basically, this means that the shareholder must be paid fair market value, or the IRS might reclassify any additional corporate earnings as “wages.” Additionally, the owners of an S Corporation are considered employees of the company, not owners. So the “owners” of an S Corp get to skip out on the self-employment taxes that members of an LLC would have to pay.
Plan Ahead with Reduced Taxable GainsIf you open your business with the intention to sell it at some point, then the S Corp might suit you perfectly. When you finally want to sell your business, your taxable gains from the sale may very well be less than if you were selling a C Corporation instead of your S Corporation. Not everyone wants to close their business, but when they do want to, or have to, it’s always nice to walk away with some money.
They have an Unlimited LifespanIf you do indeed plan on making sure your business sticks around for a while, the S Corporation works in your favor as well. Unlike an LLC, S Corporations have an unlimited life span. Your business will continue to exist even if you leave as the owner. The business can continue operating without too much trouble or upkeep. However, say you have the best intentions to run your own business and stick with it through the years, through thick and thin, but something comes up and you have no choice but to transfer ownership. In some forms of incorporating, this can mean a lot of hassle. Though with an S Corporation, ownership can be easily handed over by selling the company stock.
Additionally, if after a while you think an S Corporation isn’t for you after all, that maybe you’d like to stick with a C Corporation, you can easily drop the S Corporation status with the IRS at any time.

McVay Business Services - 850-725-5696 - Pensacola LLC & S-Corporation Specialist

    Mike McVay, Tax Accountant Blog
    Certified ​QuickBooks ProAdvisor & Licensed Tax Accountant Pensacola, FL

    Best Price
    ​No Compromise

    Picture

    Author

    Mike McVay, Accountant Experienced IRS Tax Resolution Specialist
    With over 20-years experience working with individuals, families & small business owners. McVay has long term knowledge in taxation to help with their income tax, I.R.S tax issues and businesses management.
    850-725-5696​
    Mike@MikeMcVay.com

    Book An Appointment

    Archives

    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    August 2015
    July 2015
    February 2015
    January 2015
    December 2014
    November 2014

    Categories

    All

 ©2022 this website and all of its sub domains are owned and operated by
​McVay Consulting Services Inc. dba McVay Business Services
All Rights Reserved · Privacy Policy in place.
Pensacola Tax Services, Payroll, Accounting & QuickBooks Services
​
Mike@MikeMcVay.com

​850-725-5696

5336 N. Blue Angel Parkway
Pensacola, FL 32526


Client Portal Login

Subscribe to our newsletter