As far as federal income taxes are concerned, LLCs don’t really exist. The Internal Revenue Code — the body of law that outlines all federal income taxation — treats each LLC as if it were one of the other types of entities. Specifically, unless they have elected otherwise, single-memb...
an S Corp is essentially a tax status recognized by the IRS. LLCs and some corporations can elect S Corporation tax status by filing paperwork with the IRS, as discussed below.
What Are The S-Corp Tax Election Benefits For LLCs? When you choose the S-Corporation election, the profits you distribute from the company are treated as passive income. This means you do not have to pay 12.4% Social Security Tax or the 2.9% Medicare Tax on these dividends, once you’...
Self-employed people who operate as anS corporation might be able to reduce the self-employment taxthey would have to pay if they operated as a sole proprietorship. As an S-corp, you can classify some of your income as salary and some as a corporate distribution.FICApayroll taxes (which ...
As a boss, the sums that you pay into employee retirement accounts are considered to be a valid deduction. However, it’s also possible to claim a write-off for the amount that you pay into your own retirement account. You need to follow the rules that the IRS has laid down regardingca...
SALT Workaround for CA. CA bill AB150 signed recently gives a ‘federal’ tax deduction opportunity for CA S corp, Multi-member LLC and Partnership owners. How it works: The entity owner elects to pay a CA tax of 9.3% on their share of distributive income from their entity. That indivi...
The S corporation has a responsibility to file an informational income tax return each year as well as a range of other IRS forms.
WCG CPAs & Advisors and Jason Watson, CPA, have released the 2025 Edition of Taxpayer’s Comprehensive Guide to LLCs and S Corps. Over 400 pages of pure pleasure! This edition has updated 2025 data such as IRA and 401k limits including Social Security wage limits, but it also has a bun...
TaxPro LLC takes your personal privacy seriously. Because we value our client's relationship with you, we do not share client information. The Gramm-Leach-Bliley Act establishes federal regulations governing the disclosure of consumers' personal financial information by financial institutions, including ...
If you are incorporated as an LLC, you may declare that the LLC is taxed as an S Corp by filing Form 2553 with the IRS. How to Calculate S Corp Taxes: A Step-by-Step Guide Step 1: Determine S Corporation Net Income Calculate your S Corporation's net income by subtracting business ...