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an llc is taxed like a sole proprietor, so you pay self-employment tax on all profits. an s-corp lets you split income between salary and distributions, which can lower your tax bill.
trust your accountant and ask them for detailed explanations. get the most out of what you’re paying and don’t worry about asking for explanations, they’re used to it.
If you want to run with the big dawgs you got to pay your kennel fees.
If you have steady income, sure it could make sense. $450 is worth it IF the tax savings are justified by the accountant. Suggest they provide a one pager explaining the tax savings for next 3 years compared to previous 3. That’ll help make a confident decision.
Tax write off benefits for solo S Corp are awesome. I’ve had my s corp since 2012. First year I filed I saved over $25k due to write offs and pass throughs. Not legal advice but yeah, feel free to do your own research. 🧐 🤓
All good 😎
It’s not the $450 one time conversion fee. S corps require different filings on a regular basis that your accountant will sure will be charging you for to be compliant. S corp makes sense if you gross around 400k/yr on a consistent basis to offset the costs. Otherwise it’s prolly not worth it
I think you added an additional “0,” S-Corps can make sense if you net as little as $40k.
You can do it for free filling out and mailing form Form 2553. The irs will receive it, and they will mail you back with their response. That’s it.. you’re an S-Corp. pretty simple
After you’re an s-corp, You”ll need to sign up for a payroll service,I use gusto. I pay $40-70/m for it.
You can fill out and file the S corp paperwork for yourself - it's extremely easy download from .gov (just google it and download from the official govt website. You missed the deadline to backdate it to Jan for 2025 (I think it was March) . So you may just want to wait and do it for 2026 taxes. You need to make over a certain amount of money for it to be worthwhile (- it varies but let's say over $70k) because it incurs extra accounting time and payroll taxes etc.
I’m sure it is