LLC vs S Corp

[Bostener]

speak to your tax adviser
except for the $9 in new york
LLC is better not personally liable

I am not sure what you meant but a LLC in NY costs more than $9.

[Bostener]

S corps are very not practical for small businesses. Stricter Operational Processes. S corps require scheduled director and shareholder meetings, minutes from those meetings, adoption and updates to by-laws, stock transfers and records maintenance.

S corporations are only for small corporations! If you have to many share holders you don't qualify for S status.

[notanonymous]

S corporations are only for small corporations! If you have to many share holders you don't qualify for S status.

I think the limit is 75 shareholders.

[aygart]

Its amazing to see how much wrong advice some folks post (here).

FTFY

[Got a clue]

I think the limit is 75 shareholders.

As we say here YMMV

[Bostener]

I think the limit is 75 shareholders.

100 shareholders.

It use to be 75 many years ago.

[Bostener]

As we say here YMMV

Sorry but its wrong, this rule is the same for everyone.

[hocker]

the tax is the same in as much that with both the income flows through to the owners. unlike a C corp which pays its own taxes.

But as mentioned above with an S-corp you can save 15% SS taxes on a portion of the $.

Since you didn't give any hints on what type of business you're doing I will just bring up one more idea. Make your business a partnership (with your wife preferably) and you'll be the only working partner while your wife will be a non-working partner, that way you'll save SS tax on "your wife's" portion.

[Am]

S corporations are only for small corporations! If you have to many share holders you don't qualify for S status.

true, I probably should have worded it either "very small business" or "new businesses" which I assumed was the case of the OP

[alpicone]

But as mentioned above with an S-corp you can save 15% SS taxes on a portion of the $.

But if the business is in NYC then the S-Corp classification isn't recognized and you need to pay corporate income taxes of 8.85% on your NYC taxable income. This negates the the SS benefits...

Also if you have other sources of wages that you are paying SS on the benefit is further reduced since you only pay SS on the first $X.

[alpicone]

There are a lot of very important facts which you haven't detailed about this new entity that you are setting up that is critical in deciding which entity type to use. Then again the entity type decision is an opinion and in many cases opinions will differ.

1) Business type/purpose
2) Active/Passive
3) Location
4) Number of owners
5) Aggressiveness of deducible expenses
6) Expected Net Income
7) Other sources of income

Trusting random people on the internet that you cant vouch for their knowledge and qualifications can potentially cost you thousand of $$$ for making the wrong decision.

[Sowhat]

In NYS, depending on County, a LLC is more expensive to set up than a corp.

[Centurion]

I am not sure what you meant but a LLC in NY costs more than $9.

set up about the same
llc have to pay $9 a year (filing fee)

[alpicone]

set up about the same
llc have to pay $9 a year (filing fee)

LLC's need to publish their formation which is a bit more than $9 so the setup costs aren't the same.

LLC's in NY also need to pay an annual filing fee depending on the level of income: http://www.tax.ny.gov/pit/efile/annual_filing_fee.htm. If the filing fee is more than $25 the OP should be asking a CPA these questions.

[Bostener]

set up about the same
llc have to pay $9 a year (filing fee)

Again, a LLC in NY costs more then $9.

[Yungerman]

Anyone from FL?

[Bostener]

Anyone from FL?

Take an accountant from Florida.

[Bostener]

S corps are very not practical for small businesses. Stricter Operational Processes. S corps require scheduled director and shareholder meetings, minutes from those meetings, adoption and updates to by-laws, stock transfers and records maintenance.

A C corporation also has these formalities.

[Am]

A C corporation also has these formalities.

not an LLC though