LLC First, Then S-Corp! Here's Why...

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Күн бұрын

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Thinking of starting a new business? The business structure you choose is integral to not only its success, but also how much you'll be paying in taxes down the road. Choosing the wrong structure can result in you losing out or having to pay way more than necessary, which is why tax expert Karlton Dennis is here today, to relieve you of the research needed!
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Пікірлер: 85

@arthouston7361 4 ай бұрын

As a new LLC member/manager, I am thankful for your advice. It will allow me to have better conversations with my professionals.

@mike2959 15 күн бұрын

And LLC’s does not “give” you tax breaks. LLC’s do nothing for you on taxes. S-Corp does.

@marinothegoat347 9 ай бұрын

just found your channel now im in the noti squad and watched a dozen videos good content

@Mannyphresh1994 9 ай бұрын

Thank you for your contribution.

@cintiamartinez05 4 ай бұрын

Hello, I just watched one of your vids for the first time. Thanks for the information, it was explained very clearly. You have a new follower now 😁

@AbhishekGupta-sx4yc 4 ай бұрын

Thank you Karlton! You laid it out so clearly. I have watched so many videos but could not find the level of clarity on the journey of a small business.

@BlancaRodriguez-ih9uy 4 ай бұрын

A very important protection besides the type of entity is Business Insurance. Business Insurance will pay if you're liable and protect your business asset and future earnings, if you are sued the insurance will also represent you at court.

@Genovia816 7 ай бұрын

Very clear, your explain things so well ❤

@HarshPatel-fg5yi 4 ай бұрын

This still doesn't answer my question im stuck on right now, you can set up LLC as multiple ways. LLC can be set up as single owner and S corp or corporation. As a new LLC owner I am stuck on how should I elect my LLC to be taxed as, single member owner, S corp or Corporation. Keeping in mind this is a new ecommerce business that has no sales yet

@Quetzelkoa 15 күн бұрын

This is really clearly stated and helped me out so much, thank you!

@Raynerjrp 3 ай бұрын

When you register the company with the IRS and you have more than 1 member they categorize the business as a General Partnership by default. However, the company is still an LLC, so converting to S Corp is a taxation decision. What I don't have clear is why a General Partnership doesn't have liability protection for the owners when it is an LLC

@gypsy3171 5 ай бұрын

Thank you young man for sharing your knowledge! God bless! 🙏

@atahualpaolivo5133 7 ай бұрын

Earned a subscriber brother! Excellent explanation, flow of info and summary at the end.Thanks.

@user-mf9ze8bf3j 9 ай бұрын

This was so informative

@bzsaylor 4 ай бұрын

Best explanation of this concept IMO

@Loso2233 9 ай бұрын

Great video

@silvergate8952 9 ай бұрын

Great video!!!

@robbysanchez6514 9 ай бұрын

Karlton thank you so much for your advice. I'm planning in opening an LLC for my home ispection buisness amd you've helped me alot. I love learning from you! Keep up the videos about corporations and taxes! Maybe some realestate tax videos? Thanks again your awsome.

@robbysanchez6514 9 ай бұрын

Actually I just saw all your additional stuff in the links below!

@ah9129 6 ай бұрын

Karlton spittin! Great vid

@dg5476 9 ай бұрын

Thanks.

@dg5476 9 ай бұрын

Key word “profit”

@theetravelhippie 9 ай бұрын

makes perfect sense

@Greatapp446 2 ай бұрын

Excellent video. Thanks Karlton!

@thatoneguy396 4 ай бұрын

New subscriber. Thanks dude

@mgeezy10 2 ай бұрын

Bro.....this was the most helpful video i've watched on this. Thank you for your work!

@MarlonRibunal 2 ай бұрын

This is helpful! I was at the verge of switching from LLC but I am not at the threshold yet. Thanks Karlton!

@RIPSKID 9 ай бұрын

very helpful

@Fibemessie 6 ай бұрын

LLC - SCorp info not new, but the level of details here for such a short video is apt. Thank you. Will follow your advice

@charlesschreader848 6 ай бұрын

The downside of S Corp is you don’t get the 20% QBI deduction on the salary portion of S Corp income and that closes the gap between the benefits between LLC and S Corp

@rogersmj 5 ай бұрын

I watched several of his videos around this topic and I think he frequently misses some piece of this puzzle, and it winds up making the S Corp. look much more attractive over the LLC than it really is.

@Anonymous-yz9ie 5 ай бұрын

Hey there, so quick question. If an LLC is making about $80K a year, the QBI deduction is a much greater benefit than switching to S-Corp? I'm wondering what happens when we are single filer and we make $200K a year and we go over the QBI Deduction margin of $191K? Then we don't qualify for the 20% right? Maybe that's when it's best to switch to S-Corp? Just wanted to pick your brain a lil. It seems that the LLC combined with the QBI Deduction, under the right circumstances will actually give you a refund from the IRS right? Lol

@Evangelionism 4 ай бұрын

An LLC and an S Corp are not mutually exclusive, nor are they the same business instrument class. LLC is a legal classification (i.e., corporation, partnership, sole proprietorship, etc.), whereas an S Corp is a tax election status (e.g., c corp, s corp, etc.). Your LLC can be taxed as an S corp, and so can your corporation, which can alternatively be taxed as a c corp. Whether your LLC is taxed as a sole proprietorship/partnership or s corp depends on your needs. So, we're not really comparing two equal types of configurations here, hence why many KZfaq and internet video and article titles are inherently misleading. Again, a corporation (legal entity) can be taxed as a c corp tax election or s corp tax election, and an LLC can be taxed as an s corp or sole proprietorship/partnership (single-member vs multi-member, respectively).

@mike2959 Ай бұрын

Wrong. S-Corp owner here. 60K is my reasonable comp W2, my distribution comp is 120K. Of course my 60K is taxed for SS and Medicare at 7.65% paid for by me, and 7.65% paid for by my company side. So I pay $4590 and my company pays $4590. The 120K is not subject to self empl taxes. The 20% QBI would not apply in either form of compensation. If I was a sole prop I would have to pay the full 15.3% self empl tax on 180K that’s $27540 SCorp style I pay $4590, company pays $4590, If I got the 20% QBI on a sole prop salary of 180K that’s a 36K deduction leaving 144K to be nailed with self employment taxes of still of $22,300. It’s not even close.

@combat_ro 15 күн бұрын

@Evangelionism that's exactly what I was researching when I landed on this video. I just formed an LLC which will have 2 DBAs, and I'm leaning towards being taxed as an SCorp or CCorp, but trying to weigh the pros and cons. And I'm in California btw

@sha_la007 9 ай бұрын

Thank you for the video. Could you explain DBAs under and S_Corp, please. I will most likely stay with an S_Corp. Thank you in advance.

@onlyamir4ge 7 ай бұрын

Thank you for this information from somebody who has very little financial knowledge.

@Ozilfan11 9 ай бұрын

What if your a music artist starting up, doing things independently to write off start up cost like equipment. Which one would be better a S-Corp or LLC

@micahmohannalandscape 5 ай бұрын

Thankyou, excellent

@twosisterschat 8 ай бұрын

When do you use the LLP? Is it an LLC with the Partnership agreement?

@rudnellpotter3084 9 ай бұрын

Great video Karlton. Very informative. I have a question about this topic on setting up a company structure. I’m about to start a company with a couple that has a Group home for disabled persons and my girlfriend. We are dividing profit and loss 50% for them and 50% for us. My girlfriend and I created LLC companies each and were thinking of forming an S Corp where each of our LLCs were the entities of that Corp. The other couple owns two other group homes. Would that be wise for any of us?

@spookybooscarystorytime 9 ай бұрын

This sounds like a dumb question. My LLC and Personal accounts are at different banks. I'm trying to decide where to put my savings accounts for taxes. Is that better to put under the LLC or the personal account?

@spookybooscarystorytime 9 ай бұрын

what is the point if you are still paying the full amount of the 15% between both tax systems. You still end up paying the same 100% of FICA because you own both your personal taxes split.

@SamAdamFreeman 6 ай бұрын

Good content.

@truckingwithcliff 9 ай бұрын

I'm a llc on a s-corp I'm a trucking company, I had a employee so I set both of us up on gusto payroll service, so that my personal tax and business tax is paid. Is this not a good idea to have my payroll on a payroll service? Any information will greatly be appreciated.

@globalhawkllc 9 ай бұрын

@KarltonDennis does this mean if I'm making $320k with an LLC my ecosystem tax deduction drops to only half of the FICA amount due to paying only on the first $160k?

@SweetCicely 9 ай бұрын

Thank you Mr. Dennis!🙏🏽 What’s the difference between paying taxes with an S-Corp vs. Corporation…?

@KarlaDennis 6 ай бұрын

Hey there, Karla Dennis here. An S-corp is a corporation... Are you referring to S-corp vs. C-Corp?

@jasneskis 9 ай бұрын

Please do a video about LLC. I have one with all paper work. I was told I have to file some papers since it has been around for 6 months. The business has made no money. It has only lost money. I don’t know what papers I am supposed to file or where. This is an online business. Will never make a lot of money. Can I just do it with my social security # Can you explain.

@ferdinandalvarez8307 5 ай бұрын

Hello, Carlton. Thank you for your informative videos. I need help finding a tax professional for my LLC. First time to file tax this year. Thanks.

@AmethystRose-cw1ek 9 ай бұрын

should I get a trust first then an LLC within the Trust?

@SkS13003 23 күн бұрын

so , not knowing how much my business will make, do i switch to scorp as soon as i pass that profit threshold (any time of the year)?

@RIPSKID 9 ай бұрын

hello! how about the corporation?

@megaheat8838 2 ай бұрын

What if your llc makes no money in that year?

@user-rq6ju5ui6w 5 ай бұрын

Would like to know what is more suitable for only a 1 employee- self owned business in Texas. S corp or LLC? What would be the best option to save in TAX money but also not too liable

@okaygworl 9 ай бұрын

LOVED this information! Do you have any videos or advice on reasons to switch to an LLC vs. staying just with regular single person taxes (idk the terminology lol)? I’m a delivery driver for a couple of apps, but idk if it’ll save me more money during tax time to switch to an LLC because I make less than $400 most weeks.

@michaeldstern 8 ай бұрын

you have to form an LLC

@gimmekimmy 6 ай бұрын

question: the llc owner makes the $100,000, gets hit with the 15.3% se tax on the whole amount...and that happens (on schedulec?) above the AGI line...so then the AGI will be taxed at their state and federal levels? but for an s corp owner, that $40,000 salary is the only part that will be taxed at the 15.3% level...and the distribution amount of $60,000 finds its way onto the personal tax return from the 1099div or k1 so that is where it factors into AGI and is only taxed at the federal and state levels?

@Anne1000. 8 ай бұрын

This video made it sound like LLC is better that S-corp until I watched you tax video. Now I’m not confused wether to stay an LLC

@TheDivaIsIntheDetails 6 ай бұрын

I felt that way too.. I think it depends on how much revenue your business makes annually. Start with the LLC, and the Self employment tax is palatable, but as you grow, you would likely need to switch to an SCorp

@Anne1000. 6 ай бұрын

@@TheDivaIsIntheDetails thank you! I currently have an LLC.

@koenig12 5 ай бұрын

What about an LLC electing to be taxed as an Scorp, is that the same thing as having to restart as an SCorp? To move to an Scorp wouldn't you have to get a new EIN etc?

@ChaunceyDatGuy 9 ай бұрын

💯💯

@OriginalThemeSong 9 ай бұрын

Can creating a Business bank account and not my personal bank account help lower my taxes when creating an LLC?

@KarlaDennis 6 ай бұрын

Absolutely, Once you've acquired your business EIN number, you should go to a bank and open a business checking account with that EIN #. that last thing you want do is start co-mingling funds with your personal and business.

@cadenitadelnazareno6717 8 ай бұрын

Bro your videos are dope fr fr. Learned a lot just wish I had a business to actually put this practice. 😅

@user-ic6kq4vt9t 9 ай бұрын

Karlton - this is short sighted. Building a business within an S-Corp can expose you to Section 311(b) if you want to move /transfer the business. Plus, it is difficult to raise capital/attract an investor since only a single class of stock is permitted (e.g. cannot have preferred stock). Many businesses that have grown regret being inside an S-corp

@dailyrant4068 8 ай бұрын

I don't think that's fair. Clearly he is speaking to a lot of single owner people, like people who do professional services. These types of businesses can basically never attract investment anyway. You're not opening up a franchise-able business like a restaurant or a ice cream shop.

@user-ic6kq4vt9t 8 ай бұрын

@@dailyrant4068 did you see his latest IG post? He tells people to NOT have rental property/STR business INSIDE an S-CORP due to SE TAX - which is it?

@nicholasshook7513 9 ай бұрын

I paid 500,000 in SE taxes

@tyrelgranger8105 8 ай бұрын

Is it worth it to keep it an LLC if you’re making more than 160 K a year?

@JtotheRizzo 7 ай бұрын

I have a SMLLC taxed as an S-Corp. I use this SMLLC as my holding company for all my IP, trademarks, etc. I wanted to start a new operating LLC taxed as a Partnership to save on Social Security/Medicare taxes. Is it legal (in the eyes of the IRS) to have my SMLLC/S-Corp to be one of the Partners along with me (under my personal name) in this LLC/Partnership? (Example: Partner 1 = SMLLC/S-Corp and Partner 2 = Me). I would be the only "human" in this operating LLC/Partnership. Appreciate your thoughts on this.

@bjbg6838 9 ай бұрын

👍🏾

@sopheakchum 8 ай бұрын

I’m with sole proprietor and my shop makes annually approximately 300k before any deductions, I mean total sale. Can you explain to me, if is the best going forward to LLC or S-corps

@koenig12 5 ай бұрын

$300 Gross doesn't mean much, how much net income?

@Ozilfan11 9 ай бұрын

What if you are a profitable day trader, would a S-Corp be ideal?

@Dougrime 9 ай бұрын

Same question but also related to crypto - best way to keep taxes low on crypto beyond holding then more than 1 yr?

@RLang03 4 ай бұрын

An LLC is a LEGAL classification. Your note about how partnerships and sole proprietorships not having legal protection isnt correct, because they can both be LLCs. LLC is not a taxation classification.

@heyloveistheway 2 ай бұрын

What good is the 60 percent of your non salary gonna do you if you can't spend it? you cant spend it bc it's not your salary, right? So how is it helping to be a S corp?

@kyeob2833 9 ай бұрын

So when you write off your personal things for your business cant they too be ceased?? 🤔

@SiblingsTalk7 2 ай бұрын

Yup they can so that’s why they get business insurance I think. I’m trying to learn more money more problems they weren’t lying

@tesaikealiiolanakila 7 ай бұрын

Found the answer 😅

@ninodaghost 9 ай бұрын

Na this ain’t fully accurate if you have a LLC don’t flip it to a s corp because you’ll lose age an a revolving account you wanna place it under a s corp as DBA