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  • 2017.10.10 - OnlineTaxman - When to switch from LLC to S Corp
    • So with this you don't pay any self-employment tax, because you're technically an employee of this corporation.  But you do pay some kind of new tax on the corporation.
    • Summary
      • The right time to convert your LLC to S Corp
        • From a tax perspective, it makes sense to convert an LLC into an S Corp, when the self-employment tax exceeds the tax burden faced by the S Corp.
        • In general, with around $40,000 net income you should consider converting to S Corp. Depending on your circumstances the breakeven point could even be as low as $25,000 net income.
      • How to convert an LLC to S Corporation
        • For federal tax purposes you can simply make an election for the LLC to be taxed as an S Corporation. All you need to do is fill out a form and send it to the IRS.
        • It is important to note that one must convert to an S Corp by March 15 in order to be applicable for the following year, or within 75 days of opening the LLC to be applicable for the year of opening
        • Even though the IRS classifies the LLC as S Corp, it is still an LLC and may be taxed as such by the state where it is formed.

Change domicile to a state with no income tax

California

Registering companies abroad

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