S Corp Conversion
What is a S-Corporation?
As I’ve mentioned in a previous post, you can file your business taxes as a sole proprietorship, partnership, or corporation. S-Corporation stands for Subchapter S Corporation and is a tax status under the IRS. S-Corporations have less than 100 shareholders.
Why should I convert?
Usually small businesses choose to convert from a sole proprietorship (or partnership) to a S-Corporation to save on their tax expense. The benefit of a S-Corporation is that it avoids double-taxation; meaning, the business doesn’t have to pay taxes at both the corporate level and individual level. The profits/losses of the business are passed through to the owner, who reports it on his/her personal income tax return.
When should I convert?
A general rule of thumb is to convert once your annual business net income surpasses $50,000 and/or when you hire W2 employees (pay their social security and medicare taxes). There are several variables to consider when making this decision, such as whether you plan on taking out a loan in the near future, the salary amount you need to support your cost of living, and your spouse’s income (if you file taxes jointly). I include all of these variables in my analysis (see the package below for more information).
How do I convert?
If you don’t already have an EIN, you will need to register for one. If you already have an EIN, you do not need a new one.
Notify the IRS.
Make yourself, the owner, a W-2 employee and determine a reasonable salary.
Pay employment taxes on the federal, state, and local levels (if applicable). Tip: Employees need to be registered in the state they live in. Meaning, payroll taxes should be paid to that state too.
I need help!
Don’t want to do all that work yourself? Yeah, you’ve got better things to do! Through my conversion package, you will receive consultation specific to your business and your financial situation; and have the conversion done for you!
$1,800.00
Determine whether a conversion would save you money and aligns with your financial goals
Determine a reasonable salary
Set up payroll
Required documentation
Accountable plan
Employee expense reimbursement guide
What is a S-Corporation?
As I’ve mentioned in a previous post, you can file your business taxes as a sole proprietorship, partnership, or corporation. S-Corporation stands for Subchapter S Corporation and is a tax status under the IRS. S-Corporations have less than 100 shareholders.
Why should I convert?
Usually small businesses choose to convert from a sole proprietorship (or partnership) to a S-Corporation to save on their tax expense. The benefit of a S-Corporation is that it avoids double-taxation; meaning, the business doesn’t have to pay taxes at both the corporate level and individual level. The profits/losses of the business are passed through to the owner, who reports it on his/her personal income tax return.
When should I convert?
A general rule of thumb is to convert once your annual business net income surpasses $50,000 and/or when you hire W2 employees (pay their social security and medicare taxes). There are several variables to consider when making this decision, such as whether you plan on taking out a loan in the near future, the salary amount you need to support your cost of living, and your spouse’s income (if you file taxes jointly). I include all of these variables in my analysis (see the package below for more information).
How do I convert?
If you don’t already have an EIN, you will need to register for one. If you already have an EIN, you do not need a new one.
Notify the IRS.
Make yourself, the owner, a W-2 employee and determine a reasonable salary.
Pay employment taxes on the federal, state, and local levels (if applicable). Tip: Employees need to be registered in the state they live in. Meaning, payroll taxes should be paid to that state too.
I need help!
Don’t want to do all that work yourself? Yeah, you’ve got better things to do! Through my conversion package, you will receive consultation specific to your business and your financial situation; and have the conversion done for you!
$1,800.00
Determine whether a conversion would save you money and aligns with your financial goals
Determine a reasonable salary
Set up payroll
Required documentation
Accountable plan
Employee expense reimbursement guide
What is a S-Corporation?
As I’ve mentioned in a previous post, you can file your business taxes as a sole proprietorship, partnership, or corporation. S-Corporation stands for Subchapter S Corporation and is a tax status under the IRS. S-Corporations have less than 100 shareholders.
Why should I convert?
Usually small businesses choose to convert from a sole proprietorship (or partnership) to a S-Corporation to save on their tax expense. The benefit of a S-Corporation is that it avoids double-taxation; meaning, the business doesn’t have to pay taxes at both the corporate level and individual level. The profits/losses of the business are passed through to the owner, who reports it on his/her personal income tax return.
When should I convert?
A general rule of thumb is to convert once your annual business net income surpasses $50,000 and/or when you hire W2 employees (pay their social security and medicare taxes). There are several variables to consider when making this decision, such as whether you plan on taking out a loan in the near future, the salary amount you need to support your cost of living, and your spouse’s income (if you file taxes jointly). I include all of these variables in my analysis (see the package below for more information).
How do I convert?
If you don’t already have an EIN, you will need to register for one. If you already have an EIN, you do not need a new one.
Notify the IRS.
Make yourself, the owner, a W-2 employee and determine a reasonable salary.
Pay employment taxes on the federal, state, and local levels (if applicable). Tip: Employees need to be registered in the state they live in. Meaning, payroll taxes should be paid to that state too.
I need help!
Don’t want to do all that work yourself? Yeah, you’ve got better things to do! Through my conversion package, you will receive consultation specific to your business and your financial situation; and have the conversion done for you!
$1,800.00
Determine whether a conversion would save you money and aligns with your financial goals
Determine a reasonable salary
Set up payroll
Required documentation
Accountable plan
Employee expense reimbursement guide