LLC vs. S-Corp

[Lion]

I used the following

I used something like this when my clients told their lawyer to make them an S-corp but the lawyer made them a C-corp:

STATEMENT EXPLAINING REASONABLE CAUSE FOR FAILURE TO FILE THE FORM 2553 BY THE ORIGINAL DUE DATE OF THE ELECTION

Shareholders hired lawyer to incorporate their business. Lawyer told shareholders the company should be an S Corporation. Shareholders agreed and told lawyer to file the appropriate paperwork. Lawyer told shareholders it would be effective 1 January 2008. Therefore, shareholders operated as if they were an S Corporation. They told business tax preparer they were an S Corporation, so EA prepared forms 1120-S and CT-1120S and distributed the resulting K-1s to both shareholders. Husband and wife shareholders reported all K-1 information on their personal income tax returns.

[Gretel]

I am attending a business seminar (Jennings) right now. We were advised not to make any S-election in the near future since it is highly likely that all income from S-Corps will be subject to SE tax. Any S-Corp is then locked in for 5 years.

In addition Bob believes strongly that there will be no limit for SS taxes any longer.

[ChEAr$]

I am attending a business seminar (Jennings) right now. We were advised not to make any S-election in the near future since it is highly likely that all income from S-Corps will be subject to SE tax. Any S-Corp is then locked in for 5 years.

In addition Bob believes strongly that there will be no limit for SS taxes any longer.

The proposal to start taxing all S corp profits as if they were self employment income has been around about.. oh... 8 years or so. Now, if it were such a hot idea, why hasn't
congress done anything about it? Could it just BE... that congressmen use S corps for their speaking engagement activities? Hmmm....

But that's certainly no reason to cease forming S corps for tax purposes. You're not
locked in for 5 years. If need be, simply acquire a new stockholder, even a really minority one, who doesn't qualify and PRESTO! the S election is out the window.

Or, simply dissolve that corporation, transfer assets to a new one and continue to march.

[Bees Knees]

The proposal to start taxing all S corp profits as if they were self employment income has been around about.. oh... 8 years or so. Now, if it were such a hot idea, why hasn't
congress done anything about it? Could it just BE... that congressmen use S corps for their speaking engagement activities? Hmmm....

New Congress
New President

We've heard for years about Socialized Medicine as well. How much you want to bet we finally get that in the not so distant future?

[luke]

chEAr$

you mean like Medicare?

[ChEAr$]

You lost me there,

you mean like Medicare?

luke. To what was that a reference?

[David760]

There is draw back in CA

CA charges an additional fee on annual (gross) income. The fees start at incomes over $250,000. The fees start at $900 and caps at $11,790. Not sure about other states.