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From LLC to INC

Discussion in 'Business Operations' started by cutman2000, Feb 2, 2012.

  1. cutman2000

    cutman2000 LawnSite Member
    Posts: 202

    What are the advantages and disadvantages when going to INC(S-Corp) from LLC? I am sole prop. I'm mainly concerned about filing, getting more(income tax) back if possible. I am also aware of the ability to offer shares to non members if I'm INC. I have been filing(standard joint) with my wife as a sole proprietor and we have been getting earned income, but wondered if going INC would hurt us or help us.

    I know this is a question for a CPA, but was just wondering if anyone had any similar experiences that could help me out a little with some insight.

  2. grass-scapes

    grass-scapes LawnSite Bronze Member
    Posts: 1,552

    15 percent self employment tax.

    with INC, you should be able to avoid that......IF.....IF.....you pay yourself a reasonable salary based on the job you do.

    The rest of the profit will trickle down and you will report it on your personal taxes, assuming you do the s-corp. C-corp you don't want.

    the profits from the business you will just pay your normal tax rate as long as you pay yourself that reasonable salary I just mentioned.

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