This video was incredibly helpful in my understanding how an LLC is different than an S-Corp. I also wanted to know how to pay myself if I go to S-Corp, and you touched on that, too. Thank you!
If you have a one-owner business and are considering whether you should stay a sole proprietorship or form an LLC, here's the video to watch: ruclips.net/video/5ClAJYWTLRA/видео.html
Good point! Yes I do plan to add more visuals / graphics in the future -- I agree they are also helpful to me in understanding and retaining information.
Hi Elizabeth, thanks for a very informative video. I'm planning to start a small home building company and have heard advice from C corp and S Corp and now really hearing this about LLC for the first time. I would not be an actual contractor but a subcontractor managing the process. Any suggestions for a recommended structure? Previously I was thinking S Corp but LLC sounds simpler but then you said it's easier to get credit with an S Corp or c Corp structured as an S Corp.
Hi Elizabeth. Thank you for making such great content. I wanted to know if it's a better option to elect to pay taxes as an S Corp with an llc than opening a new S Corp
Hey Elizabeth as a Real Estate Investor that's engaged in active strategies like flipping or wholesaling im learning that for active income strategies, C Corps are a better entity to choose especially when speaking of the business growth and planning side. Because C Corp files separate , Banks, lenders don't know you're in business for yourself and buy getting the money out of the C Corp as a W-2 Salary, essentially you make yourself appear as a regular W-2 employee since most time banks scrutinize small business owners and love w-2 employees. So essentially you can control the narrative that's perrcieved of you. Which in this case makes qualifying for loans much easier to take down more deals. So although I may take a tax hit upfront, taking into consideration what im trying to accomplish (qualifying for loans much easier) I can have access to bank money with cheaper rates. From a Strategic standpoint, What are your thoughts?
That sounds good in theory, but banks will still know the C Corp is a small business. I assume that in this theory the C Corp itself is applying for a loan -- then in due diligence, they will look at the information and books of the company and see it is closely held by only one or a few owners. It is good that it is the corporation can develop its own credit rating, so eventually it can qualify for loans, but that is unlikely to happen on day 1 when it is new.
Hey Chris, I am the similar situation as a wholesaler/flipper. I was considering an S-Corp, especially I am obtaining revenue from another stream of income as a contractor. I never heard of anyone in this business or flipping/wholesaling doing s C-Corp. I am under the impression you can do what you want as an S-Corp and avoid to be double taxed as a C-Corp would.
I’m starting my real estate investment business but I’m so unsure as of which type to select, LLC or S-Corp. How are you guys doing it and what have been your experience?
we open a corp company with out searching well, now we want to change the name of the company and maybe change it to llc. would you recomment me to do that or just close this company and open a new one ??
You can change the name just by a filing with the state (usually called an "amendment" to your incorporation documents) - that's pretty straightforward, then just need to change the name in your other places (banking, etc.). If you want to change from a corporation to an LLC, if you are already operating the business it makes sense usually to convert it with the state. If you haven't operated yet, might be easier to just shut it down (but if you are in California watch out for $800/year franchise fee - depends upon how long the corporation has been existing).
Hi Elizabeth , I’m starting a business in Oxnard, Ca. I need help setting up the business. I would prefer to pay someone to guide me through it. Who would I go to? 1. I want it to be a LLC 2. Which mailing service can I use instead of my house address with the government 3. What and how to fill out forms 4. Which billing software is best 5. Which bank is best 6. Need to make a yearly service contract 7. What kind of legal service I should retain to help with business issues 8. What kinds of receipts to use 9. Which insurance company and type is best 10. I assume h&r block is the best for taxes
Hi - if you need this level of support, check out the Patreon membership www.patreon.com/elizabethpw . I also recorded some videos that include reviews of various service providers, and will be adding more: ruclips.net/p/PLd0wcIHXfOTcqL6ltujdaMVrhn_IoNxdg
love your videos... im just getting my wholesale dealer license(usd car sales to auctions or other car dealers only.. not to public) , would you know how these type of business are set up as? im thinking s corp but not sure..
Ah so the rule is that all owners need to be "individuals, certain trusts, and estates" who are not "non-resident alien" individuals. So my understanding is that if someone qualifies as a resident via SPT then that may work, but the problem is that they must keep being an SPT and that depends on behavior (someone could be SPT for only half of a year, for example, depending on what they are doing that year). I'm not an immigration attorney though, and they are the experts on that (or tax accountants perhaps.) I'd recommend speaking to your immigration attorney or tax accountant to make sure you can keep the right status for all the time the S Corp shares are owned.
I love this video! I do have a question, if you don't mind ❤ Does a Sole Proprietor C Corp have to pay the Proprietor a salary? If so, what if it doesn't actually have the revenue to pay the Sole Proprietor?
Sole proprietor and C Corp are two different legal entity types. Maybe you mean a C Corp with one owner? No it does not have to pay the owner-as-employee because the C Corp itself pays taxes (double taxation).
If my LLC is taxed as an S corp will I still be required to pay the $800 tax fee yearly? Also, how can I find out if Body Sculpting can become S Corp? and thank you so very much for all your video and help... so appreciated.
Yes both LLCs and S Corps (and C Corps) in California have to pay the $800/year minimum franchise fee. Well except that right now, the first calendar year is $0 for both. Since you don't need a medical license for body sculpting, it can be an LLC.
Make sure you never refer to your contractors as employees -- if they are "employees" you can't use the 1099 to pay them -- you'd need to run traditional payroll to pay them. But to answer your question, assuming you are an LLC, you'd need to run the numbers (or have a tax preparer run them) to see if the tax status savings of an S Corp makes sense in that exact situation.
I understand there are some limitations on one entity versus the other, but overall it seems that an LLC with S Corp election gives you the best of the two worlds. Or am I missing something?
@@ElizabethPW Thank you for your response. Another follow up, do LLCs taxed as S Corps get audited more than Corporations taxed as S Corps? I know there are many variables for audits but based on stats, do you have any recommendations on that?
Hello Elizabeth. Thank you for the video it was great. If I was looking to start an investment firm what do think would be the best LLC, s-Corp, or c-Corp? Thank you.
For most people, it works to start out as an LLC and then switch your tax status to LLC-taxed-as-an-S-Corp (if you qualify) once you are making a certain level of revenue.
Some states don't have an EIN for every business, but some do. Go to the state's corporate website, employer website, and/or their tax revenue website and look for info on a state tax ID
10:00 • VERY interesting...! Assuming S corps don't have access to this same benefit, why aren't S corps able to access similar or identical non-taxation benefits when such a business reinvests its profits without leftovers at the end of the fiscal year?
Well the S Corp owners will be taxed on the profits at the end of the year, even if they are reinvested (that's how the s corp pass-through taxation works). But the company doesn't have to distribute those profits -- the owners could pay the taxes out of their own pockets (or do a small distribution just to pay taxes) and then reinvest the profits into the biz.
Anyone can be the owner of a C Corp ... for an S Corp it is about being a legal resident (which could be a green card but there are other legal resident status)
I have a question?? If I wanted to start my own boutique BUT I wanted to buy items offline and design/ bedazzled a item I got offline what would I need? A LLC , or S CORP or C CORP ??
Hi Elizabeth, thank you for the amazing video. From my perspective being a foreign national residing outside the USA. Would it make more sense to go down the c corporation route that offers better legal protection vs. an LLC in Delaware?
The C Corp is best in certain tax situations and also if you are looking to go public or get outside investors. But many of my foreign clients go with a corporation because they are not comfortable with an LLC (since they don't have that in their own country)
I just recently form a LLC, and I am a 1099 independent contractor. My employer insist on paying me in my name and not into my LLC bank account because he hired me as a provider at his clinic and not my LLC. Would it be okay to deposit the paycheck in my name into my LLC? Thank you
Weird that the boss is doing that -- it is in their interest to pay an LLC - makes it more likely that you are a contractor. Anyway, I don't know if the bank will accept the deposit if it is made in your name and not the LLCs. Besides that, you may want to talk to a tax person because the main issue is you want to make sure that if your LLC or you were audited, this won't be rejected -- your boss will issue you a 1099 personally so the IRS will think you are personally going to pay the taxes on that check.
Your video was precious, and I have a question about S Corporation compared to LLC. Does it protect the individual owner, and is it better than LLC in terms of paying taxes, according to the articles I read. Do you think Amazon S Corporation is suitable for business?
An LLC and an S Corporation both protect the owner. Yes you can save money on taxes with an S Corporation, but that only happens if you are making enough money to take advantage of it (usually in the high five-figures of profit), because an S Corp has additional costs in the complexity of it. If you are just starting out, an LLC may be better (that you can elect for it to be treated as an S Corp later).
Thank you & Good morning . I was advice as NP IN CA by bizfileonlone CA of State to file that the Entity form should be General Stock of Corporation instead of P.C? Is this true or there missing something? I will still be supervise by MD but not working directly with them
Hello, I’m in NY and I just opened up a LLC for my husband and I to provide transportation services. How can we pay him a salary and how can we lower the amt of taxes we’re paying? He started working under his friend’s LLC co in March 2022 and didn’t put aside taxes, now he owes over 10,000
To be able to do more tax planning, you would elect for the LLC to be taxed as an S Corp www.irs.gov/forms-pubs/about-form-2553 and then you can run payroll for him - you may also want to talk to an accountant or tax person who can negotiate with the IRS for you to set up payments
Thank you for this informative video! Here's my question. I am a Licensed Educational Psychologist (LEP) licensed in California. After 11 years of working in the pubic schools, I want to go into private practice. Can I form an LLC? Our professional organization (California Association of School Psychologists-CASP) seems to recommend an S-Corp, but I know that therapists in California can't form LLCs, and have to form professional corporations. Do these same rules apply to LEPs? I am just so confused!
Yes since LEPs are licensed under the Business & Professions Code (section 4989.20) then the only options for a one-owner practice are sole proprietorship or professional corporation. Also, it can be a professional corporation that is taxed as an S Corp (the S Corp is the tax thing, not the legal thing).
I'm not quite sure what you mean, but you'd create the corporation with the state, then get the EIN for the corporation, then file the paperwork to elect it to be treated as an S Corp
@@ElizabethPW thanks so much. For 2021 taxes, we filed as a C corp so had to submit a late form 8832 but can we fill out the S Corp form to file that way for the year or should be just continue as C corp for this year and try to change over for next year?
Hey Elizabeth, I’m just starting up my content creation business via gaming mostly on twitch and RUclips as well as ebook publishing. I’m in the process of submitting my form 8832 and im so torn and a bit stressed as to what to get taxed as, I was honestly wondering what you’d suggestion for someone whose a single owner but also someone who wants to take advantage of tax writes off on things to start up my business such as editing software and equipment as well as potential travel write offs for traveling for collaborations. I plan on being a one man band until I can find serious business partners in the future. Thank you
I assume you have created an LLC and are thinking of submitting a form 8832 to have it taxed as a corporation. Many items like travel, start up expenses, ordinary expenses -- they are deductible against income if your LLC is taxed as a sole prop or as a corporation. There are tax savings for corporations but they tend to not kick in until the business is making more revenue and profit. Now there are unique situations where a corporation tax status makes sense from the beginning, but you'd want to chat with a tax person to see if those apply to you. (Will be hard to get a tax person appointment right now in late March / early April, though.)
@@ElizabethPW Thanks for thé response and can I always change from sole proprietor to an S Corp ? I’m just starting out so I don’t think the S Corp is the right move at this very moment, however I will book with you when you get some free time.
We just want to make sure it’s done right and we don’t miss anything. Once we get the LLC we will obtain an EIN and open a bank account with that EIN. We will run all the money through that bank including paying herself from that account. Am I missing something?
Yes if she is the only one, the default tax status is an LLC taxed as a sole prop. Yep you get the LLC, then the EIN, then a bank account, and run the $ through that. You may also need other business setup (business license, etc.) depending on where you are located
Hello! I am a hairdresser making about 100k a year of course with expenses. I am transitioning to opening a Business under s corp and INC. Does that sound right if I’m the only owner and employee right now under my business? It’s what I got recommended by a cpa. Not sure if LLC was best Thank you!
It can be an LLC taxed as an S Corp, or a corporation taxed as an S Corp. Yep you'd want the CPA to let you know if it will save money on taxes, since they have your actual numbers
I'd recommend talking to an accountant to see if the tax status matters for your particular business. Usually an LLC taxed as an S Corp is the best fit but occasionally a business should be a C Corp, and sometimes people are better off with the LLC taxed a pass-through-sole prop.
No I'm not taking clients anymore. Here are some ideas for services that can help you to form a corporation: Stripe Atlas, Doola, IncFile, or Northwest
Hi - I'm not taking new clients right now, but I will have a livestream Q/A on October 25th and also I will be opening up my Patreon soon (which will include discord DM, Q/As, and even calls at the higher level) - so check that out if you'd like to get questions answered there
Yep! I do Quick Calls (15 min for $100), which are great for figuring out what entity is best. You can find out more info here: www.elizabethpottsweinstein.com/15-min-quick-call/
I'm not taking new clients for entity formation. But if you just have questions you need answered, you can check out the Patreon at www.patreon.com/elizabethpw (some levels have q/a via DM or phone)
Hi Elizabeth! Great video! So I’m opening a mobile therapy business. One therapist recommends that I open the entity as an LLC and whereas another therapist suggested an S Corp. What would be your recommendation? I’m so confused.
Hey, I just wanted to thank you for this video. Sincerely appreciate it. I had a question for you, but don't want to post it in the comments. If you can contact me I would appreciate it. Thank you.
If I plan to sale my soap and beauty products to buyers of mayor retailers in the future say Target or Macy’s would LLC be enough? And would the be considered investors?
LLC should be fine if you are looking to pitch major retailers to carry your products. No, they wouldn't be investors unless you gave them shares of your company.
3 Long question. Sorry. U mentioned c corporations can hold money in there after salary and all other corporate expenses paid to employees. C corp will pay tax on corporate earnings. 21%.earned that tax year. Money left in c corp name in the ank earned 5% and earned during that period. So corp will pay tax when filling next year? C Corp funds still not used for investment because waiting for right opportunity to invest. How long money not used for investment can be left in corp after employees paid. And any IRS publications that gives clear guidance and all rules to hold and distribute money to employees to minimize corporate and employee taxes?
Thank you so much for all videos, I watched a lot of videos but your videos are the best. I will start business online and maybe in future it'll be visual. My DBA still in process in Santa Clara county. Can I change in future from DBA to S Corp?
Im just starting out with my hvac business and when I applied for my license I chose corporation. Now I don't know if I should of gone LLC or S corp. I was setup as C corp and I did have to pay that double tax and im a single owner lol. What advice can you give me, should I stay as a corporation? I do eventually want to grow my business to maybe mid size not too big. Thanks!
Depends on a lot of factors, but as I said in the video, usually my recommendation is LLC unless you are pitching outside investors (then it is C Corp)
Hi Elizabeth, I am starting my company selling cosmetics on my website and then eventually cosmetics and clothing but not sure if i should start as an LLC or C- Corp please help
@@ElizabethPW thank you wait is Angel funding like grants I don’t have to pay back? Because I am planning on applying for grants to get by business of the ground to buy the cosmetics I will sell online…
Im gonna start an etsy shop selling digital products as a start. I was told to purchase an llc, im the only gonna be main business owner. Would an S corp be ideal for me?
Typically an S Corp only makes sense if your business is making a lot of profit (like high five figures) or you need it for some particular other reason. You can start with an LLC and then change it to be taxed as an S Corp later (but it is still legally an LLC) -- LLCs are very flexible that way
@@ElizabethPW gotcha. I'm a new business owner. I'm not sure how much I'll make as I haven't sold anything yet. Oh I didn't know you can change from llc to S Corp later on. Ty
Shalom, Elizabeth. I'd like to have my business as S.P. Is it possible to also have it as an S-Corp? Should I obtain other employment, am I permitted to utilize my company's credentials, as entity, for taxes or payments/ checks? Thanks in advance 😊.
If you have your business as a sole proprietorship, then it is an SP for both legal and tax purposes. To have a business be taxed as an S Corp, you'd need a corporation, LLC, or partnership. But you can use your SP business to run payroll, pay expenses, or write checks -- you'd just want to get a business checking account.
It really depends on the owners and the financial/tax setup. My general recommendation is an LLC taxed as an S Corp, but it does depend on who the owners are and the revenue.
Hi Elizabeth, great video. My question I am starting a new business filed as an LLC. My business will have at least one employee working 30 to 40 hours weekly. I will continue my corporate job to help fund some upstart costs. My business will continue to grow by adding 2 to 3 people over the next 6 months. Since I will not be getting paid through the LLC is an S Corp a good option since payroll will be issued for future employees?
Hm I don't see having the LLC be taxed as an S Corp to be particularly helpful when the business is not making a profit. It really only makes sense to have an LLC be taxed as an S Corp when there is enough profit to make tax planning a big savings. Either way, any profits will be allocated to you (since it is pass through) even if you don't take a distribution or salary.
Hello! Love all your videos, very helpful. I do have one question, I am a Creative Producer in CA, I provide creative consulting to my clients as well as work as a event and video producer. I have been working as a sole-proprietor but I want to file as an S-Corp for this year. Is it better to form a Corporation and elect as an S-Corp or file an LLC and elect as an S-Corp?
Generally I recommend an LLC that elects S Corp because an LLC is easier to run with fewer legal requirements (like having an annual directors meeting with minutes).
thank you so much for sharing. I just confuse with the California Franchise tax for LLC taxed as S-corp (IRS form 2553). CA will treat my LLC as S-corp or as LLC for this situation? $800 + LLC fees (depend on revenue) is it correct? or 1.5% income?
If you elected with the IRS to have your LLC be taxed as an S Corp, then yes California also recognizes it. It will be the $800 franchise fee (which is a minimum tax), unless you make a lot of income and then it is the % (which would be more)
Thank you. I just opened an S Corp but I think I should have done C. I really only want to pay myself in Shares. I'm so new, I'm thinking of switching.
Hello I am a licensed esthetician wanting to start my own business and I’m still unsure if I fall under the “professional” category that disqualifies me from an LLC. Also don’t know if a C corp or S corp is better for me.
So it does depend on your state -- in some places an esthetician would be part of the "licensed" professionals who are required to get a professional corporation (or in some states, a professional LLC). Most likely your licensing board would tell you. Generally you'd want an S Corp unless there is a special reason you want a C Corp (you'd probably know if you had a special reason).
Great presentation in such a clear manner! Thanks. One question. As a physician in Calif who is going to work as a1099 independent contractor, I plan on electing to file as an s corp. Does it make a difference if I incorporate as an LLC or Pc? My reading from the sec state website and your video is that a physician can’t do an LLC, is that correct?
Thanks for breaking it down to plain English Elizabeth. Selected C-Corp based on the fundraising BUT the implications for founders that are non US residents are not clear, what are the top practical considerations?
Well mostly it will be around money stuff -- getting a bank account, paying yourself, and taxes. For example, many banks require you to open an account in person (not all of them, check out mercury.com/ ). Also, if your country does not have a tax treaty with the US, your salary / payouts may be subject to tax withholdings (like 30% - you can file a tax return to try to get that back but meanwhile they take out the money).
I have an LLC and I got approved after i filed 2553 to be an S corp ... should I change my State OF California LLC to s corp on state secretary page. if so which form. the forms on your videos show more options under Forms. also on form its conversion entity is changing state .? please help thanks
Hi. Great video. I have a sole prop LLC at this point. I was in real estate for many years and have now moved into insurance. No more real estate. Can I or should I keep my LLC sole prop the same or are there any changes you would advise or hurdles I will encounter? I'm a 1099.
Hi! I want to start a small business selling candles. I would be the owner and only worker until my daughter is older. I want to leave it for my daughter when I’m no longer here. I’m still a little confused. What would you recommend?
Hi - if you want the business to exist after you are gone, then you'd want to create either an LLC or corporation. All things being equal, I'd recommend an LLC specifically, because the logistics are a bit easier.
How would you incorporate if the idea is for a social purpose to make a difference but don't want a Non profit because the business that will be run will make a profit but the money will be used to make a difference?
Many states have "social purpose" or "social benefit" corporations, where the purpose of the company isn't just profit, but also some social purpose. Here's an article about it: nonprofitlawblog.com/california-social-purpose-corporation-an-overview/
Hi appreciate your video! What would you recommend for someone who is buying his own tractor and own trailer reefer to move freight to run as a solo person business
Thank you! for all the information. I am opening a small business in California as an LLC but will be filing taxes as an S Corp. Can I still manage my small business as an LLC or will I be required to have a board of directors, hold meetings, record minutes, etc...? Appreciate your feedback. Thank you!
Great question - you manage it as an LLC for the most part. The only difference is for tax related things, where you file S Corp tax returns and distribute profits (via salary and distributions) per the S Corp rules.
I’ve been trying to learn this stuff for ages but it still never makes any sense to me.. so you register as an LLC and then chose an option on how to be taxed?
My understanding is that an estheticians has to have a sole proprietorship or a professional corporation, because they are licensed under the "Business and Professions Code" - but I recommend asking your licensing board people, they would likely know what is done in the profession
HI Elizabeth, I learned from your video that you can classify your business as an LLC but still file as an S-Corp. What are the advantages of doing this versus classifying and filling as an S-Crop?
The tax classification as an S Corp is about taxes -- if you are making enough profit, you can pay yourself part a salary (regular payroll taxes) and then part distributions (income tax but no fica/self-employment tax).
Yes. For an S Corp, the owner may pay themselves two ways -- via payroll for the work they do as owner-employee, and via distributions as an owner. For payroll, normal taxes are taken out. For distributions, the owner gets a K-1 at the end of the year and must state that income and pay taxes on their personal tax return.
It really depends more upon profit amount, assets/liabilities, and benefits. There are companies making millions who are still LLCs or S Corps and there are smaller companies who are C Corps -- because it makes more sense due to their tax bill, deductions, etc.
Hey Elizabeth- if I'm starting a new company. I'm based in California and my partner is based in London- is an LLC the best route? The Company will be run in Los Angeles.
It likely would be best to have an LLC or Corp when the owners are in two different countries -- otherwise you'd have a general partnership that's located in both the UK and CA (which would get complicated fast). Sometimes my non-US clients like corporations instead of LLCs because LLCs are unknown outside of the US.
@@ElizabethPW I’m so confused! We own corporations in Canada and are from Canada. C- Corp seems like the only option since we are nonresident aliens so we can’t elect to be S-Corp. We want to buy rental properties- but it seems we need to create c-Corp- and then LLC in Ohio. We want very very low personal liability.
I am setting up an S Corp and I believe it will be taxed as an LLC...Can I do that? I am going to the Northwest services website. I am not sure if my company name on their website should be , Inc or , LLC. Can you advise? Great videos!
I guess I should add it is a financial planning business and 1099s are received in our personal name, not in the name of the business. After looking through comments, that might be an issue.
So LLC isn't a tax status. You can have an LLC taxed as a sole prop, or an LLC taxed as an S Corp or C Corp. You can have a Corp taxed as an S Corp or a C Corp. If you form an S Corp, then you'd update your W-9 with whoever gives you the 1099s with the corporate info.
Thanks for the video! I have a plan to put cars on Turo for rent, but in order to get some decent capital I was hoping to get a seizable loan. I realize that it's easier to get a loan with a business, so I'm not sure which entity would fit my situation best. Do you have any recommendations?
Wow FINALLY someone who actually KNOWS what they are talking about and conveys it SUCCINCTLY. What a breath of fresh air!
Glad you enjoyed it!
I agree 😊.
Okay, I love the way you emphasize how it is being broken down between the structure and how it will be taxed. Perfect!
Glad it was helpful, good to hear!
This video was incredibly helpful in my understanding how an LLC is different than an S-Corp. I also wanted to know how to pay myself if I go to S-Corp, and you touched on that, too.
Thank you!
Great to hear, you're welcome!
If you have a one-owner business and are considering whether you should stay a sole proprietorship or form an LLC, here's the video to watch: ruclips.net/video/5ClAJYWTLRA/видео.html
LLC offers much more protection than a sole on personal assets.
Thanks for explaining in simple words!
Glad it was helpful!
Very, very helpful! Thank you for making this!
welcome!
Awesome video.Just subscribed!
Glad you liked it - thanks for subscribing!
Thank you. What I missed here is some visualization in order to be able to follow.
Good point! Yes I do plan to add more visuals / graphics in the future -- I agree they are also helpful to me in understanding and retaining information.
Hi Elizabeth, thanks for a very informative video. I'm planning to start a small home building company and have heard advice from C corp and S Corp and now really hearing this about LLC for the first time. I would not be an actual contractor but a subcontractor managing the process. Any suggestions for a recommended structure? Previously I was thinking S Corp but LLC sounds simpler but then you said it's easier to get credit with an S Corp or c Corp structured as an S Corp.
Excellent exploration
Welcome!
Super helpful thank you
Welcome!
Hi Elizabeth. Thank you for making such great content. I wanted to know if it's a better option to elect to pay taxes as an S Corp with an llc than opening a new S Corp
All things being equal I usually recommend an LLC that is taxed as an S Corp, because less required paperwork and more flexibility
Hey Elizabeth as a Real Estate Investor that's engaged in active strategies like flipping or wholesaling im learning that for active income strategies, C Corps are a better entity to choose especially when speaking of the business growth and planning side. Because C Corp files separate , Banks, lenders don't know you're in business for yourself and buy getting the money out of the C Corp as a W-2 Salary, essentially you make yourself appear as a regular W-2 employee since most time banks scrutinize small business owners and love w-2 employees. So essentially you can control the narrative that's perrcieved of you. Which in this case makes qualifying for loans much easier to take down more deals. So although I may take a tax hit upfront, taking into consideration what im trying to accomplish (qualifying for loans much easier) I can have access to bank money with cheaper rates. From a Strategic standpoint, What are your thoughts?
That sounds good in theory, but banks will still know the C Corp is a small business. I assume that in this theory the C Corp itself is applying for a loan -- then in due diligence, they will look at the information and books of the company and see it is closely held by only one or a few owners. It is good that it is the corporation can develop its own credit rating, so eventually it can qualify for loans, but that is unlikely to happen on day 1 when it is new.
Hey Chris, I am the similar situation as a wholesaler/flipper. I was considering an S-Corp, especially I am obtaining revenue from another stream of income as a contractor. I never heard of anyone in this business or flipping/wholesaling doing s C-Corp. I am under the impression you can do what you want as an S-Corp and avoid to be double taxed as a C-Corp would.
I’m starting my real estate investment business but I’m so unsure as of which type to select, LLC or S-Corp. How are you guys doing it and what have been your experience?
Thank you for this video
we open a corp company with out searching well, now we want to change the name of the company and maybe change it to llc. would you recomment me to do that or just close this company and open a new one ??
You can change the name just by a filing with the state (usually called an "amendment" to your incorporation documents) - that's pretty straightforward, then just need to change the name in your other places (banking, etc.). If you want to change from a corporation to an LLC, if you are already operating the business it makes sense usually to convert it with the state. If you haven't operated yet, might be easier to just shut it down (but if you are in California watch out for $800/year franchise fee - depends upon how long the corporation has been existing).
Very informative thank you
Hi Elizabeth ,
I’m starting a business in Oxnard, Ca.
I need help setting up the business. I would prefer to pay someone to guide me through it. Who would I go to?
1. I want it to be a LLC
2. Which mailing service can I use instead of my house address with the government
3. What and how to fill out forms
4. Which billing software is best
5. Which bank is best
6. Need to make a yearly service contract
7. What kind of legal service I should retain to help with business issues
8. What kinds of receipts to use
9. Which insurance company and type is best
10. I assume h&r block is the best for taxes
Hi - if you need this level of support, check out the Patreon membership www.patreon.com/elizabethpw . I also recorded some videos that include reviews of various service providers, and will be adding more: ruclips.net/p/PLd0wcIHXfOTcqL6ltujdaMVrhn_IoNxdg
love your videos... im just getting my wholesale dealer license(usd car sales to auctions or other car dealers only.. not to public)
, would you know how these type of business are set up as? im thinking s corp but not sure..
S corp should work fine but check with a tax person or accountant
Thanks! Just to clarify S corps can be formed by non green card holders or citizens if the pass the Substantial Presence Test
Ah so the rule is that all owners need to be "individuals, certain trusts, and estates" who are not "non-resident alien" individuals. So my understanding is that if someone qualifies as a resident via SPT then that may work, but the problem is that they must keep being an SPT and that depends on behavior (someone could be SPT for only half of a year, for example, depending on what they are doing that year). I'm not an immigration attorney though, and they are the experts on that (or tax accountants perhaps.) I'd recommend speaking to your immigration attorney or tax accountant to make sure you can keep the right status for all the time the S Corp shares are owned.
So we can open an llc that behaves like an s corp from tax point of view but do banks see it that way?
Hm well a bank would consider it an LLC. If you want a bank to consider it to be a corporation, then you'd need to create that from the beginning
I love this video! I do have a question, if you don't mind ❤ Does a Sole Proprietor C Corp have to pay the Proprietor a salary? If so, what if it doesn't actually have the revenue to pay the Sole Proprietor?
Sole proprietor and C Corp are two different legal entity types. Maybe you mean a C Corp with one owner? No it does not have to pay the owner-as-employee because the C Corp itself pays taxes (double taxation).
@@ElizabethPW Thank you! Yes, single owner C Corp. I subscribed ❤️
If my LLC is taxed as an S corp will I still be required to pay the $800 tax fee yearly? Also, how can I find out if Body Sculpting can become S Corp? and thank you so very much for all your video and help... so appreciated.
Yes both LLCs and S Corps (and C Corps) in California have to pay the $800/year minimum franchise fee. Well except that right now, the first calendar year is $0 for both. Since you don't need a medical license for body sculpting, it can be an LLC.
Hi Elizabeth! Thanks for making this video. It was very informative. If an LLC has contractors as employees (1099), would an S corp be ideal?
Make sure you never refer to your contractors as employees -- if they are "employees" you can't use the 1099 to pay them -- you'd need to run traditional payroll to pay them. But to answer your question, assuming you are an LLC, you'd need to run the numbers (or have a tax preparer run them) to see if the tax status savings of an S Corp makes sense in that exact situation.
@@ElizabethPW help me setup art gallery
I understand there are some limitations on one entity versus the other, but overall it seems that an LLC with S Corp election gives you the best of the two worlds. Or am I missing something?
Agreed, that is my general recommendation, all things being equal
@@ElizabethPW Thank you for your response. Another follow up, do LLCs taxed as S Corps get audited more than Corporations taxed as S Corps? I know there are many variables for audits but based on stats, do you have any recommendations on that?
So if my company is LLC taxed as a C corporation, and I wanted to go public with my company would I have to convert my LLC into a C corporation?
Typically if you want to pitch VC or go public yes you'd convert to a C Corp
Hello Elizabeth. Thank you for the video it was great. If I was looking to start an investment firm what do think would be the best LLC, s-Corp, or c-Corp? Thank you.
For most people, it works to start out as an LLC and then switch your tax status to LLC-taxed-as-an-S-Corp (if you qualify) once you are making a certain level of revenue.
Hello quick question how do Inapply for a SEIN I DID OBTAIN THE EIN # BUT ITS ASKJNG ME FOR SEIN I JJST DID A S CORPORATION
Some states don't have an EIN for every business, but some do. Go to the state's corporate website, employer website, and/or their tax revenue website and look for info on a state tax ID
10:00 • VERY interesting...! Assuming S corps don't have access to this same benefit, why aren't S corps able to access similar or identical non-taxation benefits when such a business reinvests its profits without leftovers at the end of the fiscal year?
Well the S Corp owners will be taxed on the profits at the end of the year, even if they are reinvested (that's how the s corp pass-through taxation works). But the company doesn't have to distribute those profits -- the owners could pay the taxes out of their own pockets (or do a small distribution just to pay taxes) and then reinvest the profits into the biz.
@@ElizabethPW I appreciate you taking time to elaborate and explain; thanks so much! I understand now 🎆
So for Notary Public what route would be best?
I usually recommend LLC and you can switch to "LLC taxed as an S Corp" later, for tax savings
Much appreciated
welcome!
Can someone with a valid SS number but without a green card yet can be a shareholder/owner of a corporation?
Anyone can be the owner of a C Corp ... for an S Corp it is about being a legal resident (which could be a green card but there are other legal resident status)
I have a question??
If I wanted to start my own boutique BUT I wanted to buy items offline and design/ bedazzled a item I got offline what would I need? A LLC , or S CORP or C CORP ??
Well generally either an LLC or Corporation would work fine. C Corp if you are going to pitch venture capital or other investors.
Thanks For the great Advice,
I have a transportation business like Limo and Car Service, what do you recommend?
It really depends on many factors (that I talk about in the video), not just the type of business
For e-commerce business LLC is better for S Corp?
LLCs are usually easier paperwork
Hi Elizabeth, thank you for the amazing video. From my perspective being a foreign national residing outside the USA. Would it make more sense to go down the c corporation route that offers better legal protection vs. an LLC in Delaware?
The C Corp is best in certain tax situations and also if you are looking to go public or get outside investors. But many of my foreign clients go with a corporation because they are not comfortable with an LLC (since they don't have that in their own country)
I just recently form a LLC, and I am a 1099 independent contractor. My employer insist on paying me in my name and not into my LLC bank account because he hired me as a provider at his clinic and not my LLC. Would it be okay to deposit the paycheck in my name into my LLC? Thank you
Weird that the boss is doing that -- it is in their interest to pay an LLC - makes it more likely that you are a contractor. Anyway, I don't know if the bank will accept the deposit if it is made in your name and not the LLCs. Besides that, you may want to talk to a tax person because the main issue is you want to make sure that if your LLC or you were audited, this won't be rejected -- your boss will issue you a 1099 personally so the IRS will think you are personally going to pay the taxes on that check.
Hi Elizabeth, I love your videos, thank you! Is there any way I could ask you something personally, meaning do you have a website? Thank you!
You can check out elizabethpw.com
Your video was precious, and I have a question about S Corporation compared to LLC. Does it protect the individual owner, and is it better than LLC in terms of paying taxes, according to the articles I read. Do you think Amazon S Corporation is suitable for business?
An LLC and an S Corporation both protect the owner. Yes you can save money on taxes with an S Corporation, but that only happens if you are making enough money to take advantage of it (usually in the high five-figures of profit), because an S Corp has additional costs in the complexity of it. If you are just starting out, an LLC may be better (that you can elect for it to be treated as an S Corp later).
Nurse practitioner in california. Should u go S cor or P.C? I do not know if we can do LLC?
Right you cannot do an LLC, so you can set up a professional corporation (and elect for it to be taxed as an S Corp)
Thank you & Good morning .
I was advice as NP IN CA by bizfileonlone CA of State to file that the Entity form should be General Stock of Corporation instead of P.C? Is this true or there missing something? I will still be supervise by MD but not working directly with them
Hello, I’m in NY and I just opened up a LLC for my husband and I to provide transportation services. How can we pay him a salary and how can we lower the amt of taxes we’re paying? He started working under his friend’s LLC co in March 2022 and didn’t put aside taxes, now he owes over 10,000
To be able to do more tax planning, you would elect for the LLC to be taxed as an S Corp www.irs.gov/forms-pubs/about-form-2553 and then you can run payroll for him - you may also want to talk to an accountant or tax person who can negotiate with the IRS for you to set up payments
Thank you for this informative video! Here's my question. I am a Licensed Educational Psychologist (LEP) licensed in California. After 11 years of working in the pubic schools, I want to go into private practice. Can I form an LLC? Our professional organization (California Association of School Psychologists-CASP) seems to recommend an S-Corp, but I know that therapists in California can't form LLCs, and have to form professional corporations. Do these same rules apply to LEPs? I am just so confused!
Yes since LEPs are licensed under the Business & Professions Code (section 4989.20) then the only options for a one-owner practice are sole proprietorship or professional corporation. Also, it can be a professional corporation that is taxed as an S Corp (the S Corp is the tax thing, not the legal thing).
How could you be contacted, in case of a consulting service for creating a corporation structure?
I'm not taking new clients right now. Best of luck with your search!
For an S Corp- when applying for an EIN do you need to fill out paperwork as a small business?
I'm not quite sure what you mean, but you'd create the corporation with the state, then get the EIN for the corporation, then file the paperwork to elect it to be treated as an S Corp
@@ElizabethPW how do I elect to be an s Corp?
So we are a one owner LLC but have 3 independent contractors that work for us. Are we still able to tax as an S Corp?
The independent contractor's don't have an effect on whether your biz can be taxed as an S Corp
@@ElizabethPW thanks so much. For 2021 taxes, we filed as a C corp so had to submit a late form 8832 but can we fill out the S Corp form to file that way for the year or should be just continue as C corp for this year and try to change over for next year?
Hey Elizabeth, I’m just starting up my content creation business via gaming mostly on twitch and RUclips as well as ebook publishing. I’m in the process of submitting my form 8832 and im so torn and a bit stressed as to what to get taxed as, I was honestly wondering what you’d suggestion for someone whose a single owner but also someone who wants to take advantage of tax writes off on things to start up my business such as editing software and equipment as well as potential travel write offs for traveling for collaborations. I plan on being a one man band until I can find serious business partners in the future. Thank you
I assume you have created an LLC and are thinking of submitting a form 8832 to have it taxed as a corporation. Many items like travel, start up expenses, ordinary expenses -- they are deductible against income if your LLC is taxed as a sole prop or as a corporation. There are tax savings for corporations but they tend to not kick in until the business is making more revenue and profit. Now there are unique situations where a corporation tax status makes sense from the beginning, but you'd want to chat with a tax person to see if those apply to you. (Will be hard to get a tax person appointment right now in late March / early April, though.)
@@ElizabethPW Thanks for thé response and can I always change from sole proprietor to an S Corp ? I’m just starting out so I don’t think the S Corp is the right move at this very moment, however I will book with you when you get some free time.
Right you can change in a future year
About to get an LLC for my wife’s Lash business. She’s the only 1 in the business. Does she get her LLC as a sole proprietor?
We just want to make sure it’s done right and we don’t miss anything. Once we get the LLC we will obtain an EIN and open a bank account with that EIN. We will run all the money through that bank including paying herself from that account. Am I missing something?
Yes if she is the only one, the default tax status is an LLC taxed as a sole prop. Yep you get the LLC, then the EIN, then a bank account, and run the $ through that. You may also need other business setup (business license, etc.) depending on where you are located
Hello! I am a hairdresser making about 100k a year of course with expenses.
I am transitioning to opening a Business under s corp and INC. Does that sound right if I’m the only owner and employee right now under my business? It’s what I got recommended by a cpa.
Not sure if LLC was best
Thank you!
It can be an LLC taxed as an S Corp, or a corporation taxed as an S Corp. Yep you'd want the CPA to let you know if it will save money on taxes, since they have your actual numbers
Hi Elizabeth what would you recommend for a new construction company ?
I'd recommend talking to an accountant to see if the tax status matters for your particular business. Usually an LLC taxed as an S Corp is the best fit but occasionally a business should be a C Corp, and sometimes people are better off with the LLC taxed a pass-through-sole prop.
I want to open an s corporation. Do you provide this service?
No I'm not taking clients anymore. Here are some ideas for services that can help you to form a corporation: Stripe Atlas, Doola, IncFile, or Northwest
you are the best! tks.
HI MAM HOW TO FORM INC CAN YOU PLEASE HELP
I’m not taking clients to form businesses, you can try doola.com
Hello Elizabeth, can you help me to set up the right business entity?
or even to figure out which one would be right for me?
Hi - I'm not taking new clients right now, but I will have a livestream Q/A on October 25th and also I will be opening up my Patreon soon (which will include discord DM, Q/As, and even calls at the higher level) - so check that out if you'd like to get questions answered there
Hello Elizabeth, Is it possible to change from LLC to a Corporation.
Yep that is called a "conversion"
@@ElizabethPW Thank you for your help.
Do you offer a consultations to find out which entity is best for a business?
If so how much you charge ?
Yep! I do Quick Calls (15 min for $100), which are great for figuring out what entity is best. You can find out more info here: www.elizabethpottsweinstein.com/15-min-quick-call/
@@ElizabethPW hey there. clicked on the link and it doesn't work? you got an email?
Partnership?
Haven't done a video on that yet, but a good idea I'll add to my list.
Hi Elizabeth
Are you taking new clients?? I hope you can help me with my business entity
Thank you
I'm not taking new clients for entity formation. But if you just have questions you need answered, you can check out the Patreon at www.patreon.com/elizabethpw (some levels have q/a via DM or phone)
Hi Elizabeth! Great video! So I’m opening a mobile therapy business. One therapist recommends that I open the entity as an LLC and whereas another therapist suggested an S Corp. What would be your recommendation? I’m so confused.
You can be an LLC that is taxed as an S Corp. That way you get the more simple paperwork of an LLC with the tax benefits of an S Corp.
@@ElizabethPW thanks so much! I’ll look into this process ASAP!
Hey, I just wanted to thank you for this video. Sincerely appreciate it. I had a question for you, but don't want to post it in the comments. If you can contact me I would appreciate it. Thank you.
If you'd like to ask advice via email, you can sign up for the $25/month level on Patreon www.patreon.com/elizabethpw
If I plan to sale my soap and beauty products to buyers of mayor retailers in the future say Target or Macy’s would LLC be enough? And would the be considered investors?
LLC should be fine if you are looking to pitch major retailers to carry your products. No, they wouldn't be investors unless you gave them shares of your company.
3 Long question. Sorry.
U mentioned c corporations can hold money in there after salary and all other corporate expenses paid to employees. C corp will pay tax on corporate earnings. 21%.earned that tax year. Money left in c corp name in the ank earned 5% and earned during that period. So corp will pay tax when filling next year? C Corp funds still not used for investment because waiting for right opportunity to invest. How long money not used for investment can be left in corp after employees paid. And any IRS publications that gives clear guidance and all rules to hold and distribute money to employees to minimize corporate and employee taxes?
Here's a good article about retained earnings www.upcounsel.com/tax-on-retained-earnings-c-corp
Thank you. Do you provide legal services in texas?
Only for trademark filings
Ok thank you.
Ezekiel Dale
Thank you so much for all videos, I watched a lot of videos but your videos are the best.
I will start business online and maybe in future it'll be visual.
My DBA still in process in Santa Clara county.
Can I change in future from DBA to S Corp?
Yes you can change from a DBA to an S-Corp - many small businesses do that when they are making more income.
Thanks so much for the education and information! This was very succinct and easily understandable.
Welcome!!
Im just starting out with my hvac business and when I applied for my license I chose corporation. Now I don't know if I should of gone LLC or S corp. I was setup as C corp and I did have to pay that double tax and im a single owner lol. What advice can you give me, should I stay as a corporation? I do eventually want to grow my business to maybe mid size not too big. Thanks!
You could stay a corp but elect to be taxed as an S Corp
I have a C corp, I am an electrician, not making much, and paying taxes. What would you recommend?
It really depends on the exact numbers -- best to have a tax person / accoutant run the numbers both ways to see what makes sense
If I start a business and everything’s an out of pocket expense, with no investors atm, should I go with the LLC or SCorp?
Usually it is best to have an LLC because the most simple, when there's no income
@@ElizabethPW thanks for the info
Hi mam I want to open my compny in USA . I have my watches brand . What type of compny is good for me .
Depends on a lot of factors, but as I said in the video, usually my recommendation is LLC unless you are pitching outside investors (then it is C Corp)
Thank you for sharing this vital information. I really needed it 😊.
So glad!
Thanks for this video
Welcome!
great info very clear thx
Glad it was helpful!
What a great video! Thanks for the info
Welcome!
Hi Elizabeth, I am starting my company selling cosmetics on my website and then eventually cosmetics and clothing but not sure if i should start as an LLC or C- Corp please help
I'd only file a C Corp if you plan to pitch venture capital or angel funding. If you are self-funding, I'd go with an LLC
@@ElizabethPW thank you wait is Angel funding like grants I don’t have to pay back? Because I am planning on applying for grants to get by business of the ground to buy the cosmetics I will sell online…
Thank you for answering question in advance
Im gonna start an etsy shop selling digital products as a start. I was told to purchase an llc, im the only gonna be main business owner.
Would an S corp be ideal for me?
I should add I'm new to entrepreneurship
Typically an S Corp only makes sense if your business is making a lot of profit (like high five figures) or you need it for some particular other reason. You can start with an LLC and then change it to be taxed as an S Corp later (but it is still legally an LLC) -- LLCs are very flexible that way
@@ElizabethPW gotcha. I'm a new business owner. I'm not sure how much I'll make as I haven't sold anything yet. Oh I didn't know you can change from llc to S Corp later on. Ty
Shalom, Elizabeth. I'd like to have my business as S.P. Is it possible to also have it as an S-Corp? Should I obtain other employment, am I permitted to utilize my company's credentials, as entity, for taxes or payments/ checks? Thanks in advance 😊.
If you have your business as a sole proprietorship, then it is an SP for both legal and tax purposes. To have a business be taxed as an S Corp, you'd need a corporation, LLC, or partnership. But you can use your SP business to run payroll, pay expenses, or write checks -- you'd just want to get a business checking account.
what would you recommend for a smoke shop
It really depends on the owners and the financial/tax setup. My general recommendation is an LLC taxed as an S Corp, but it does depend on who the owners are and the revenue.
Hi Elizabeth, great video. My question I am starting a new business filed as an LLC. My business will have at least one employee working 30 to 40 hours weekly. I will continue my corporate job to help fund some upstart costs. My business will continue to grow by adding 2 to 3 people over the next 6 months. Since I will not be getting paid through the LLC is an S Corp a good option since payroll will be issued for future employees?
Hm I don't see having the LLC be taxed as an S Corp to be particularly helpful when the business is not making a profit. It really only makes sense to have an LLC be taxed as an S Corp when there is enough profit to make tax planning a big savings. Either way, any profits will be allocated to you (since it is pass through) even if you don't take a distribution or salary.
Hello! Love all your videos, very helpful. I do have one question, I am a Creative Producer in CA, I provide creative consulting to my clients as well as work as a event and video producer. I have been working as a sole-proprietor but I want to file as an S-Corp for this year. Is it better to form a Corporation and elect as an S-Corp or file an LLC and elect as an S-Corp?
Generally I recommend an LLC that elects S Corp because an LLC is easier to run with fewer legal requirements (like having an annual directors meeting with minutes).
thank you so much for sharing. I just confuse with the California Franchise tax for LLC taxed as S-corp (IRS form 2553). CA will treat my LLC as S-corp or as LLC for this situation? $800 + LLC fees (depend on revenue) is it correct? or 1.5% income?
If you elected with the IRS to have your LLC be taxed as an S Corp, then yes California also recognizes it. It will be the $800 franchise fee (which is a minimum tax), unless you make a lot of income and then it is the % (which would be more)
Thank you. I just opened an S Corp but I think I should have done C. I really only want to pay myself in Shares. I'm so new, I'm thinking of switching.
I’d recommend speaking with a tax person to make sure it makes sense for you
Hello I am a licensed esthetician wanting to start my own business and I’m still unsure if I fall under the “professional” category that disqualifies me from an LLC. Also don’t know if a C corp or S corp is better for me.
So it does depend on your state -- in some places an esthetician would be part of the "licensed" professionals who are required to get a professional corporation (or in some states, a professional LLC). Most likely your licensing board would tell you. Generally you'd want an S Corp unless there is a special reason you want a C Corp (you'd probably know if you had a special reason).
Great presentation in such a clear manner! Thanks. One question. As a physician in Calif who is going to work as a1099 independent contractor, I plan on electing to file as an s corp. Does it make a difference if I incorporate as an LLC or Pc? My reading from the sec state website and your video is that a physician can’t do an LLC, is that correct?
Right, you can't practice medicine with an LLC. So you select professional corporation
Thanks for breaking it down to plain English Elizabeth. Selected C-Corp based on the fundraising BUT the implications for founders that are non US residents are not clear, what are the top practical considerations?
Well mostly it will be around money stuff -- getting a bank account, paying yourself, and taxes. For example, many banks require you to open an account in person (not all of them, check out mercury.com/ ). Also, if your country does not have a tax treaty with the US, your salary / payouts may be subject to tax withholdings (like 30% - you can file a tax return to try to get that back but meanwhile they take out the money).
I have an LLC and I got approved after i filed 2553 to be an S corp ... should I change my State OF California LLC to s corp on state secretary page. if so which form. the forms on your videos show more options under Forms. also on form its conversion entity is changing state .? please help thanks
LLC is the legal entity and S Corp is the tax status. So you can just keep you LLC and have it taxed as an S Corp.
Hi. Great video. I have a sole prop LLC at this point. I was in real estate for many years and have now moved into insurance. No more real estate. Can I or should I keep my LLC sole prop the same or are there any changes you would advise or hurdles I will encounter? I'm a 1099.
Insurance LLCs do have special rules www.insurance.ca.gov/0200-industry/0020-apply-license/0300-business-license/business-entity-limited-liability.cfm
Hi! I want to start a small business selling candles. I would be the owner and only worker until my daughter is older. I want to leave it for my daughter when I’m no longer here. I’m still a little confused. What would you recommend?
Hi - if you want the business to exist after you are gone, then you'd want to create either an LLC or corporation. All things being equal, I'd recommend an LLC specifically, because the logistics are a bit easier.
How would you incorporate if the idea is for a social purpose to make a difference but don't want a Non profit because the business that will be run will make a profit but the money will be used to make a difference?
Many states have "social purpose" or "social benefit" corporations, where the purpose of the company isn't just profit, but also some social purpose. Here's an article about it: nonprofitlawblog.com/california-social-purpose-corporation-an-overview/
I am a small Realtor wanting to build business credit and grow my business. Should I do a
S corp. Or LLC?
Well if you are picking between LLC and S Corp, likely the best option is to be an LLC that is taxed as an S Corp -- you get the benefits of both
Hi appreciate your video! What would you recommend for someone who is buying his own tractor and own trailer reefer to move freight to run as a solo person business
You could do that, but make sure you have adequate insurance to cover the risks involved
Thank you! for all the information. I am opening a small business in California as an LLC but will be filing taxes as an S Corp. Can I still manage my small business as an LLC or will I be required to have a board of directors, hold meetings, record minutes, etc...? Appreciate your feedback. Thank you!
Great question - you manage it as an LLC for the most part. The only difference is for tax related things, where you file S Corp tax returns and distribute profits (via salary and distributions) per the S Corp rules.
You're amazing, thank you! Which costs less to form and maintain in California, a Corporation or an LLC?
Hm an LLC is a bit less expensive, but not by much (both have the $800/year franchise fee).
I’ve been trying to learn this stuff for ages but it still never makes any sense to me.. so you register as an LLC and then chose an option on how to be taxed?
Yes you form the LLC and then you decide how you want to be taxed (if you don't decide, then you get the default rule)
Can estheticians have an LLC in California. I’m solo and want to protect my business name.
My understanding is that an estheticians has to have a sole proprietorship or a professional corporation, because they are licensed under the "Business and Professions Code" - but I recommend asking your licensing board people, they would likely know what is done in the profession
New subscriber. Enjoyed this RUclips tutorial. I plan on establishing my own business in 2023/2014, and researching the pros/cons of a C-corp.
Thanks for subscribing, good luck with your new business!
Hello I was hoping to get a consultation with you is that a possibility? Thank you so much
Hi, thanks for asking! The best way to consult with me is via a Patreon membership -- www.patreon.com/elizabethpw
Best video I’ve come across.
Glad you think so!
HI Elizabeth, I learned from your video that you can classify your business as an LLC but still file as an S-Corp. What are the advantages of doing this versus classifying and filling as an S-Crop?
The tax classification as an S Corp is about taxes -- if you are making enough profit, you can pay yourself part a salary (regular payroll taxes) and then part distributions (income tax but no fica/self-employment tax).
Does an S-corp owner pay taxes on the distributions and if so how much?
Yes. For an S Corp, the owner may pay themselves two ways -- via payroll for the work they do as owner-employee, and via distributions as an owner. For payroll, normal taxes are taken out. For distributions, the owner gets a K-1 at the end of the year and must state that income and pay taxes on their personal tax return.
Hello, if your revenue is 40 million or more is it wise to only have a LLC entity
It really depends more upon profit amount, assets/liabilities, and benefits. There are companies making millions who are still LLCs or S Corps and there are smaller companies who are C Corps -- because it makes more sense due to their tax bill, deductions, etc.
Hey Elizabeth- if I'm starting a new company. I'm based in California and my partner is based in London- is an LLC the best route? The Company will be run in Los Angeles.
It likely would be best to have an LLC or Corp when the owners are in two different countries -- otherwise you'd have a general partnership that's located in both the UK and CA (which would get complicated fast). Sometimes my non-US clients like corporations instead of LLCs because LLCs are unknown outside of the US.
@@ElizabethPW I’m so confused! We own corporations in Canada and are from Canada. C- Corp seems like the only option since we are nonresident aliens so we can’t elect to be S-Corp.
We want to buy rental properties- but it seems we need to create c-Corp- and then LLC in Ohio. We want very very low personal liability.
I am setting up an S Corp and I believe it will be taxed as an LLC...Can I do that? I am going to the Northwest services website. I am not sure if my company name on their website should be , Inc or , LLC. Can you advise? Great videos!
I guess I should add it is a financial planning business and 1099s are received in our personal name, not in the name of the business. After looking through comments, that might be an issue.
So LLC isn't a tax status. You can have an LLC taxed as a sole prop, or an LLC taxed as an S Corp or C Corp. You can have a Corp taxed as an S Corp or a C Corp. If you form an S Corp, then you'd update your W-9 with whoever gives you the 1099s with the corporate info.
Thanks for the video!
I have a plan to put cars on Turo for rent, but in order to get some decent capital I was hoping to get a seizable loan.
I realize that it's easier to get a loan with a business, so I'm not sure which entity would fit my situation best.
Do you have any recommendations?
Hm my guess is having a corporation, but I'd recommend talking to a business advisor with SCORE or SBDC
@@ElizabethPW I was leaning towards a corporation, thank you for your response
I have a private security company currently a sole prop. Would a C-Corp be best? I'm unsure on which way to go about it.
Hm you may want to speak with your tax person to see what form will be the best way for you to save on taxes.
@@ElizabethPW thank you will do your video was very informative. I appreciate the information.