Many LLC business owners choose to convert the LLC to S-corp tax filing status.
A major reason for choosing S corp. taxation is to save money on self-employment taxes.
If an LLC is taxed like a sole proprietorship or partnership, owners are self-employed, and they pay Social Security and Medicare taxes on all business profits, up to federal limits. If an LLC is taxed as an S corp., the owners can be company employees. They must pay themselves a reasonable salary for the kind of work they do. They’ll pay Medicare and Social Security taxes on that salary, but not on any additional company profits. Owners of an S corp. may be able to put more money in tax-deferred retirement accounts than they could otherwise. But switching to an S corp. can also mean additional paperwork and expense, especially if you don’t already have other employees.
You’ll need to run payroll, you may have to enroll in state workers’ compensation and unemployment programs, and you may have additional tax forms to file.
To make an LLC to S corp. election with the IRS, you need to file form 2553 Election by a Small Business Corporation. The form must be signed by shareholders and an officer of the company.
If you want your election to be effective for the entire tax year, it should be filed:
- By March 15 of the year you want the election to take effect.
- Any time during the prior tax year.
- Within two months and 15 days of the date the business begins its first tax year for newly formed LLCs
- With State where LLC is formed for the election as well.
Where to Start?
Contact Cindie LLC at http://www.cindiellc.com
Address: 200 Centennial Avenue, Suite 106, Piscataway, NJ 08854
Phone: (732) 896-0272
Fax: (732) 676-1661
地址：新泽西州皮斯卡塔韦市Centennial Avenue 200，Suite 106，NJ 08854