llc or sole proprietorship

Discussion in 'Business Operations' started by geoscaper, Jan 13, 2005.

  1. captaingreen

    captaingreen LawnSite Senior Member
    Posts: 471

    I established as a sole proprietorship for my first two years, then at the advise of my CPA I became and LLC being taxed as an S-corp. this year. There are alot of benefits to this as mentioned above with your personal assets, as well as the tax benefits. I write myself a payroll check each week out of my DBA account and deposit it into personal checking, then the accountant is sent another check for my FICA, state and federal taxes, and unemloyment insurance- she then distributes it accordingly. This also has taken away the hassle of estimated quarterly payments. It's going to take some getting used to with the new method of paying myself but, I think it will pay off long term. Good luck!
     
  2. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    I'd look for a new CPA then because he is directly you in the wrong use of an LLC as the only advantge of a LLC over a Corp is the Double Taxation issue that faces a Operator/Owner S-Corp vs. a LLC. With an LLC you are still allowed to pay Qt'ly and avoid paying the S-Corp Tax. Which means the way you are doing it in addition to paying the nmormal taxes on your income monthly you will also get hit again at the end of the year the way he has you doing it. Also how could writing a check every month vs. writing one every 3 months for Taxes be LESS trouble for you?
     
  3. captaingreen

    captaingreen LawnSite Senior Member
    Posts: 471

    I beleive you have a subchapter s-corp confused with a c-corp. "An s-corp. avoids the double-taxation status by allowing the income of the corporation to pass through to its owners/shareholders" taken directly from my accounting text. As far as the est. quarterly payments, it was a large check to write a few months, I would rather be slow and steady with my payroll deductions.
     
  4. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569


    I think we are talking about two different things here. With a Corp, regardless of C or S you will also have to pay Corp Taxes on profit. Has a LLC it is a pass-through entity so all income and deductions will be passed through to the individual taxpayer. You will pay tax on profits at your individual rate not a Corp rate.
     
  5. captaingreen

    captaingreen LawnSite Senior Member
    Posts: 471

    Yes, I think we're on seperate pages here. I'm am a LLC, but for tax purposes filing as a subchapter S-corp. :waving:
     
  6. jpmako

    jpmako LawnSite Senior Member
    Posts: 593

    Wow this crap never ends.
    Team Gopher has posted some good links to follow regarding the differences.
    Please people read up on the subject. As has been said before there are significant differences between DBA, LLC, S-Corp, C-Corp...
    Every state has different laws/ regulations for business entities.
    Do what is best for you, do not base your opinion on what is best for someone else. The best advice is to seek a good CPA and Attorney to speak with about the differences of each and what benefits they can provide! :waving:

    Jason
     

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