What’s the tax difference between and LLC and an S Corporation?
Will you save taxes if you convert from an LLC taxed as a sole prop, to being taxed as a sub chapter s? How much taxes will you save if you become an S-Corp?
If you want to know the tax difference between an LLC and an S-Corp, then check out this video.!
In this video, I’m going to explain exactly what the difference is between an LLC and an S-Corporation, particularly when it comes to your self employment taxes, (aka SE Taxes), which are your medicare and social security taxes.
how do you reduce your business taxes? Well, there are three major tax reductions strategies: Business entity optimization, benefits and retirement plans like 401k, SEP IRA, and Simple IRA”s, and then utilizing real estate investments.
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What’s the tax difference between an LLC and an S-Corp?
What’s better, an S Corp or an LLC?
How to convert to an S Corporation?
Are there tax savings when you become an S-Corp?
What business type should I be?
How to choose a business type?
There are dozens of questions that people have concerning their business entity type. The bottom line is that people are usually trying to pay their fair share and not a penny more – that’s the most important thing to them.
If you’re looking for tax planning advice, ways to reduce your taxes, legal tax loopholes, the best tax loopholes for small business or the best tax write offs for small business – the foundation starts with your business entity type.
You should make a wise decision about becoming a limited liability company taxed as a sole proprietor or an S-Corp, because it might save you in self employment, social security and medicare taxes.
Social security taxes for an S-Corp are important to figure out!
So is figuring out the medicare taxes on an LLC or an S-corp.
We hope this video helps you out a ton!…(read more)
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As a SMLLC s corp, am I not able to reinvest everything I make from my services back into the company?
Am I required to get an hourly paycheck for the hours performing my services?
AND how much taxes will the owner pay from that payroll or "reasonable salary"?
Great breakdown. Thank you for the info.
Another thing to consider when deciding on LLC vs. S-Corp. When you create an S-Corp, this makes you an "employee" of the company. When applying for bank loans this can be beneficial, as you are submitting W-2's to the bank that shows how much you earn from the company "you work for", even if it's your own business. From a loan perspective, depending on what line of business you are in, this can look far less risky to the bank, than if you were presenting income earned via an LLC as a member/business owner in which case a bank could be more cautious of the income source. Yes, an S-Corp is a little more involved than an LLC (the primary advantage of an LLC – it's simplicity of structure and filing requirements), but if you're thinking of obtaining loans/lending from a bank/financial intuition down the line, an S-Corp could prove more beneficial.
In the face of difficult times, seize opportunities and make your business work harder. It's not easy, but it's worth it."
Distribution is like, I give myself as an employee a Self Employed IRA contribution?
Biggest blanket statement ever, play yourself a reasonable salary.
Is the business is a passive income business such as rental property does the 15% self employment tax still apply?
hi sir, please correct me if i am wrong. savings in case of s-corp example is $510 before tax right. can we assume savings would be around $350 after taxes?
what about Federal
Half of the 15.3% Self Employment Tax is deductible.
From salary, as employer, we also pay FUTA and SUTA, and they are big enough, too.
We need to stop expensive foreign wars and end entitlement programs. This is absurd.
Outstanding video!!!!!
Thanks for the awesome video. If I have a S corp and have profit, Can the single shareowner take loan out of S corp and pay the S corp with reasonable interest (AFR) each year? By doing that, the shareowner does not need to pay tax on those profit sitting in S corp. Thanks
As an S-Corp don’t I have to pay corporate tax?
Taxation is Theft
He ain’t ever talk about write offs ????
The best explanation. I have EVER heard. And I know and have had several executives try and explain.
Thank you so much!!!
Finally after watching like 10 videos I found this one and understood the difference.
Opening my S-Corp LLC in Texas to also save money on state income tax (no state income tax in Texas!)
What if we don’t have enough profit to pay reasonable salary?
what about the payroll costs???
This is why america is fucked. Big corporations want complete power, basically 45% of all profits you make will be taken by the government. No wonder small businesses can’t survive in America and our jobs get outsourced, corporations know it’s cheaper to create their products outside of our country and then import them in. Not to mention in these other countries the companies flee to there is little to no regulations, therefore our products become less safe, our jobs get taken away, and small businesses can’t thrive anymore, this is killing our economy and giving more control to big corporations who BRIBE corrupt politicians to push higher self employment tax so our small businesses can’t survive, they want complete domination. The government is corrupt the liberal Democrats are evil and want to kill America every time they get into power they increase taxes, increase spending, and kill the economy, take a look at gas, tax bills, and the market as a whole when democrats get power, it ALWAYS has negative repercussions, this is not up for debate go look at historic data yourself. And the increased taxes we have to pay, NONE of the government funded programs and shit benefit me, maybe 10% at most in some indirect way. So why can’t I opt out of paying for things that don’t benefit me? I work everyday and get no free money from anybody, yet I’m expected to give 30% of my paycheck to pay for abortions, welfare, unemployment, food stamps, and so many more for able bodied people who choose not to work. The government loves when people don’t work because they can increase taxes to pay for them and take more and more from the working man to put in their pockets. The budget increases every year and each year more money is wasted and more money is put into pockets of corrupt politicians. Why is it that America has the HIGHEST funding for our public schools in the world but the LOWEST test score results in the world, budgeting is the answer, america cannot budget. The school boards take all the money and leave schools with nothing. My school when I was in middle school couldn’t even afford the phone bill so the lady in the front office had to use her personal cell phone to take calls, while the highschool got a multi million dollar turf football field installed where our grass field was absolutely fine. We are being destroyed from the inside out by our competitors, and it’s not Russia you damn idiots it’s China. China is on year 80 of their 100 year plan to take over the world. WW3 will not be fought with guns or people but with technology and viruses. Corona virus was a test to see how’d we react and see how easily we will blindly follow what the government tells us what to do. Dr fauci is under a lot of shit right now for donating millions of dollars to labs in China who synthesize virus’s to make them human compatible before covid 19 ever existed, but you will never hear this in the media, which is owned by the liberal democrat elites, who are all in kahoots with the Chinese. Wake up. Vaccine passports are taking our Medical freedoms away, when we are denied food, medical assistance, schooling ect, because we refuse to be injected with shit into our own bodies, you have lost medical freedom, aka FREEDOM. If you have the vaccine then what the hell do you have to worry about you won’t get it. I’ll take my chances, it’s all about control america wake up. I’m not a complete fucking idiot to the liberal reading this right now, the Republican Party is just as fucking corrupt which is why our bills never can get passed because there are fake republicans in kahoots with liberals to stop all our progress. We need a new party. Bad. It’s our last chance to save america from socialism, and eventually, communism. The red scare was taken so seriously for a fucking reason. Wake up before it’s too late. Why do you think people want minimum wage to be 20 or 25 dollar an hr?!! When minimum wage is goes from, let’s say 10 an hour, to 20 an hour, the people that were making 20 an hour now make 25 an hour, or maybe 30 if they’re extremely lucky, which is doubtful, all while cost of living goes through the fucking roof. Therefore killing our economy even more and, most importantly, further strengthening the idea of universal basic income, aka streamlined socialism. Our wages come closer and closer together no matter what field you’re in, and our cost of living sky rockets, all while huge corporations keep making more and more off of us. Wake up before it’s too late. I didn’t type this for no reason if just 1 person sees this and thinks about what I said then I’ve won.
How does one justify $1 as a reasonable salary? There are some CEOs that do this. To that point, what about CEOs that don't pay themselves unless certain criteria are met, eg. Elon Musk. How does this work? These are some pretty unreasonable times we are living in.
Don’t you still have to pay taxes on that $40,000 though?
Great video love contrast
THANK YOU SO MUCH!!!!!
Question: Lets say the gross $100K from business is the only source of income. When it comes to taxable income , is it calculated from the $100K ? Or from what's left over from $100k minus 15% self employment tax ? In this video where do you get the number of 85,000?
Just the same way I saw testimony of how Austin helped a man make -$50,000 weekly Profit I tried now am also sharing my testimony with over,$10,000 from the company thanks for the good did he has done for me for this short period of time