C corp by default

[BOB W]

After reading the excellent posts on this subject I've got to say I need to bow to the wisdom of others and agree that Schedule C is the best way to handle this situation, treating the corp as never having been properly organized or perfected. I'll bet they don't have any organizational munutes, by-laws, etc - nothing but a charter.

>>>>>>>>>>>>>>>>><But if you do decide to stick with the corporation this takes you back to the question of cost, since the S/E tax is roughly the same as the corp income tax. In that case, I'd still be inclined to forget the S-corp for 2006 & just file as a C-corp.<<<<<<<<<<<

Yes, I have run across that choice as well but I have always decided to get something for the bucks being spent and chose to pay into SS for the credit down the road as apposed to the buck going to "Nothing"............

[oceanlovin'ea]

ecb34691

How would they go about doing that? Do they need to contact their workers comp carrier and tell them they are an LLC instead of a corporation?

Then they would dissolve the corporation and set up an LLC, which would result in filing as sole proprietor on their tax return.

That would solve a lot for them.

The lady and her companion are partners. She is 90% and he is 10% owners of corporation. If they become LLC, they would just divide the income and expenses by the same percentages, wouldn't they? Or however they choose.

I didn't know that you could be an LLC and still get the workers comp exemption. I have another young couple that do cleaning of new construction houses and they just incorporated because of the workers comp issue.

Thanks so much for your help and knowledge of this area.

Linda F

[BOB W]

How would they go about doing that? Do they need to contact their workers comp carrier and tell them they are an LLC instead of a corporation?

Then they would dissolve the corporation and set up an LLC, which would result in filing as sole proprietor on their tax return.

That would solve a lot for them.

The lady and her companion are partners. She is 90% and he is 10% owners of corporation. If they become LLC, they would just divide the income and expenses by the same percentages, wouldn't they? Or however they choose.


Linda F

File as a Partnership. This will give you 'till October 15 to file, although no extension was filed. But there is no penalty for this, although you may get a penalty notice that can be recinded. File the C Corp tomorrow, zeros. LLC is not posible at this time.