LLC Versuz S-Corp

926 E McMillan St,Cincinnati OH 45206

24 May, 2022

Description

The Difference between LLC and S Corp Join Zoom Meeting https://us02web.zoom.us/j/4209769911?pwd=a094aU9BU3VHaVIza0RSeEtIaWl6dz09 Meeting ID: 420 976 9911 Passcode: SCF One tap mobile +13017158592,,4209769911#,,,,*871511# US (Washington DC) +13126266799,,4209769911#,,,,*871511# US (Chicago) Dial by your location +1 301 715 8592 US (Washington DC) +1 312 626 6799 US (Chicago) +1 646 876 9923 US (New York) +1 346 248 7799 US (Houston) +1 408 638 0968 US (San Jose) +1 669 900 6833 US (San Jose) +1 253 215 8782 US (Tacoma) Find your local number: https://us02web.zoom.us/u/kNABtBObJ or Visit in person 926 E McMillan St, Cincinnati, OH 45206 S Corp vs. LLC taxesThe IRS assigns every business structure a default tax treatment – which determines how your business is taxed. A single-member LLC is taxed as a sole proprietorship. That means you pay a 15.3% FICA tax –commonly referred to as self-employment tax – on all the taxable income you earn from your business. You also pay personal income tax at a rate determined by your tax bracket. A single-member LLC taxed as an S Corp splits up that income and tax burden. As an S Corp owner, you pay yourself a salary, which has to be “reasonable compensation,” – similar to what you’d make as an employee performing the same job. You personally pay half of the 15.3% in payroll taxes, a small FUTA tax, and personal income taxes on that salary. Your business pays the other 7.65% in payroll taxes which can then be written off as a tax deduction. The rest of the company profits you earn could be taken as “distributions” which aren’t subject to payroll taxes. What are distributions you ask? Distributions are money that you take out of your business personally, by cutting yourself a check or transferring money to your personal account. Your distributions aren’t treated like self-employment income. This single-member LLC vs S Corp business may sound a little complicated. Here’s an example to clear the air. Say you earn $120,000 in revenue this year, with $20,000 in business expenses. That’s $100,000 profit (congrats!). As a sole proprietor, you pay the self-employment tax plus your personal income tax on $100,000 minus personal deductions or adjustments. As an S Corp, you could draw a salary of $50,000, and draw the remaining $50,000 as distributions. You pay payroll taxes on $50,000, plus personal income taxes on $100,000 minus personal deductions or adjustments. Zoom Option https://us02web.zoom.us/j/4209769911?pwd=a094aU9BU3VHaVIza0RSeEtIaWl6dz09 Meeting ID: 420 976 9911 Passcode: SCF One tap mobile +13017158592,,4209769911#,,,,*871511# US (Washington DC) +13126266799,,4209769911#,,,,*871511# US (Chicago) Dial by your location +1 301 715 8592 US (Washington DC) +1 312 626 6799 US (Chicago) +1 646 876 9923 US (New York) +1 346 248 7799 US (Houston) +1 408 638 0968 US (San Jose) +1 669 900 6833 US (San Jose) +1 253 215 8782 US (Tacoma) Find your local number: https://us02web.zoom.us/u/kNABtBObJ