Looking for people who have experience in this area to give their experiences or general advice regarding S-Corps. It seems like most people don't understand the benefits of filing as an S-Corp. It's not as complicated to structure your business this way, especially if you have a good accountant or CPA doing this for you.
I've never filed as an S-Corp (just as an employee), but I received my bachelor's in accounting and took a couple of tax classes in the process. I remember working on a project in one of my classes where the idea was to compare an individual under 3 different tax entities (S-Corp, C-Corp, Sole Proprietor). It was a hypothetical person, but I compared the cash flow under each entity, and the S-Corp entity had the highest cash flow, followed by C-Corp. Sole Proprietor (Sch. C) had the least cash flow.
Any thoughts from anybody who's had actual experience in this area, whether as an accountant or business owner?
Looking for people who have experience in this area to give their experiences or general advice regarding S-Corps. It seems like most people don't understand the benefits of filing as an S-Corp. It's not as complicated to structure your business this way, especially if you have a good accountant or CPA doing this for you.
I've never filed as an S-Corp (just as an employee), but I received my bachelor's in accounting and took a couple of tax classes in the process. I remember working on a project in one of my classes where the idea was to compare an individual under 3 different tax entities (S-Corp, C-Corp, Sole Proprietor). It was a hypothetical person, but I compared the cash flow under each entity, and the S-Corp entity had the highest cash flow, followed by C-Corp. Sole Proprietor (Sch. C) had the least cash flow.
Any thoughts from anybody who's had actual experience in this area, whether as an accountant or business owner?
I have an S-Corp. I set it up with Legal Zoom in 2010. I had limited funds to get it all up and running and this was one of the cheaper options. It was pretty cookie cutter but don't think I needed much more than that. At that time, I had 1 employee besides myself but now have 30-40 usually depending on a few variables, time of year etc. Definitely not an expert on tax but and have an accountant and book keeper. From my understanding it offers some benefits and protections as opposed to an LLC. C-corp for the most part is larger entities. Is there something specific you are trying to accomplish?
I have an S-Corp. I set it up with Legal Zoom in 2010. I had limited funds to get it all up and running and this was one of the cheaper options. It was pretty cookie cutter but don't think I needed much more than that. At that time, I had 1 employee besides myself but now have 30-40 usually depending on a few variables, time of year etc. Definitely not an expert on tax but and have an accountant and book keeper. From my understanding it offers some benefits and protections as opposed to an LLC. C-corp for the most part is larger entities. Is there something specific you are trying to accomplish?
Basically, some note taking and learning. I have the "Theoretical" part down, but not the "Application" or experience. Eventually, I will set up an S-Corp. It's just a matter of "when". I've never set up a business. Ultimately, I'm trying to get a better understanding of
Legal &
Tax entities. Technically, they're 2 separate things.
From a legal standpoint, I don't know as much about legal protection of entities. But LLC's seem to come up a lot.
I have a basic understanding of the
cash flow that could result from setting up an
LLC/S-Corp.
You definitely did the smartest thing you could in terms of combining legal protection and tax savings.
What type of industry are you in? If you're good with me asking.
Basically, some note taking and learning. I have the "Theoretical" part down, but not the "Application" or experience. Eventually, I will set up an S-Corp. It's just a matter of "when". I've never set up a business. Ultimately, I'm trying to get a better understanding of Legal & Tax entities. Technically, they're 2 separate things.
From a legal standpoint, I don't know as much about legal protection of entities. But LLC's seem to come up a lot.
I have a basic understanding of the cash flow that could result from setting up an LLC/S-Corp.
You definitely did the smartest thing you could in terms of combining legal protection and tax savings.
What type of industry are you in? If you're good with me asking.
There are definitely tax benefits, I am able to run a lot of expenses through my business pre tax. It has to be relevant to what you do in case you ever get audited though. If you are small a lot of times you can fly under the radar because an audit would not be worth the cost on what can be recovered. A while back I remember seeing the bigger you get the percentage chance of getting audited goes up too. If you are setting things up just to run expenses through and do not have clients or employees wouldn't worry too much. I would definitely pay an accountant a couple hours for a consult though, verify anything I said here because I do not look at tax code often at all. A lot of this is going to depend on what business and your objectives. Point being, pay the few hundred for an expert opinion,
I am in the healthcare industry
There are definitely tax benefits, I am able to run a lot of expenses through my business pre tax. It has to be relevant to what you do in case you ever get audited though. If you are small a lot of times you can fly under the radar because an audit would not be worth the cost on what can be recovered. A while back I remember seeing the bigger you get the percentage chance of getting audited goes up too. If you are setting things up just to run expenses through and do not have clients or employees wouldn't worry too much. I would definitely pay an accountant a couple hours for a consult though, verify anything I said here because I do not look at tax code often at all. A lot of this is going to depend on what business and your objectives. Point being, pay the few hundred for an expert opinion,
I am in the healthcare industry
Tax law is complicated in the US. It's understandable if you don't know everything in the tax code. They could add something new tomorrow, and nobody would notice.
Also, I agree, the consult/expert opinion is a tiny expense in the grand scheme of things.
It basically comes down to the IRS having the incentive to come after you. Is the juice worth the squeeze? No one cares if a failing business files an inaccurate return, but if you're doing great, watch out, Uncle Sam wants a piece.
Healthcare industry is a good, if not great industry to be in.
Warning!
Do not subscribe to The SoSuave Newsletter unless you are already a chick magnet!
The information in each issue of The SoSuave Newsletter is too powerful for most guys to handle. If you are an ordinary guy, it is not for you. It is meant for the elite few. Not the unwashed masses.
If you know you can handle it...
If you already have girls calling you at all hours of the day and night, showing up at your door, throwing themselves at you everywhere you go...
Then sign up below.
But if you're just an average Joe, an ordinary guy, no one special – then skip this. It is not for you.
Tax law is complicated in the US. It's understandable if you don't know everything in the tax code. They could add something new tomorrow, and nobody would notice.
Also, I agree, the consult/expert opinion is a tiny expense in the grand scheme of things.
It basically comes down to the IRS having the incentive to come after you. Is the juice worth the squeeze? No one cares if a failing business files an inaccurate return, but if you're doing great, watch out, Uncle Sam wants a piece.
Healthcare industry is a good, if not great industry to be in.
There are some triggers that makes an audit much more likely. I am in California, relatively close to Nevada. A lot of biz owners will try to claim they live in Nevada and have a 2nd home there but just work in cali to avoid CA income taxes. It can be a very substantial amount up to 12%. The california franchise tax board is very aggressive, they will pull all your cell and credit card records to verify or not if you are actually living here. I know a few people who got caught and was very expensive with fees tacked onto back taxes. You can can play with some grey areas but not worth the stress to put yourself out there too much. Would just suggest do things the right way, you can push it a little with meals, autos and other expenses but avoid the outright fraud
I'm sure there a lot of youtube videos out there of people who are trying to do what you are. Just take some time to learn
There are some triggers that makes an audit much more likely. I am in California, relatively close to Nevada. A lot of biz owners will try to claim they live in Nevada and have a 2nd home there but just work in cali to avoid CA income taxes. It can be a very substantial amount up to 12%. The california franchise tax board is very aggressive, they will pull all your cell and credit card records to verify or not if you are actually living here. I know a few people who got caught and was very expensive with fees tacked onto back taxes. You can can play with some grey areas but not worth the stress to put yourself out there too much. Would just suggest do things the right way, you can push it a little with meals, autos and other expenses but avoid the outright fraud
I'm sure there a lot of youtube videos out there of people who are trying to do what you are. Just take some time to learn
I appreciate it man. I'll just enjoy the process, and see how far I can take it.
Also, I'll just stay out of california, just because of the income taxes alone.
I appreciate it man. I'll just enjoy the process, and see how far I can take it.
Also, I'll just stay out of california, just because of the income taxes alone.
I would not suggest someone move to cali unless you had some incredible opportunity that you can not get somewhere else. Especially if you are not already wealthy. You really can not beat the weather, proximity to mountains/oceans and beauty though. Outside the major city areas most of the state is red though. I grew up here so majority of my friends, family and the biz is own is here.
I would not suggest someone move to cali unless you had some incredible opportunity that you can not get somewhere else. Especially if you are not already wealthy. You really can not beat the weather, proximity to mountains/oceans and beauty though. Outside the major city areas most of the state is red though. I grew up here so majority of my friends, family and the biz is own is here.
I may visit one day for a vacation or traveling. I'll stay away from the big cities. I live in a small state (AL), so It wouldn't hurt to broaden my horizons a bit.
I've heard the major cities are very liberal/blue, but other parts are red (like you said). Most people might think LA/Hollywood (I'm guilty of this) when they think of California, but I think they just get most of the attention.
What part of California did you grow up in?
I may visit one day for a vacation or traveling. I'll stay away from the big cities. I live in a small state (AL), so It wouldn't hurt to broaden my horizons a bit.
I've heard the major cities are very liberal/blue, but other parts are red (like you said). Most people might think LA/Hollywood (I'm guilty of this) when they think of California, but I think they just get most of the attention.
What part of California did you grow up in?
Northern California
I'm assuming it's a red area. Are there a lot of farms and agriculture in that area?
I'm assuming it's a red area. Are there a lot of farms and agriculture in that area?
Its a suburb, so there is a mix but leans red. Agriculture, bulk of it is in the central valley, nothing in my immediate proximity. The upper middle class and up surburbs, most are red with rural being to a higher degree. Don't really want to doxx where I live, so lets just leave it at that.
