How to lower your taxes

[sotc]

Llc or llp? S Corp has so many more benefits than llp. I'd recommend at least talking with a different advisor, just like all tree guys are not created equal, same with tax people

 

[emr]

We are LLC. We formed our company, our SCORE advisor, lawyer and accountant all recommended LLC. In fact, I don't personally know any small businesses (2 men or less) who aren't LLC's.

I will start asking these questions of our advisors and see what they all say. We haven't addressed this in over 5 years.


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[sotc]

So you're llc taxed as a sole prop? That should be easy to change over to taxed as an s Corp. Still flow through taxation but no more self employment tax, you will take payroll and dividends as needed or able

 

[emr]

My partner and I each owe taxes on half of the profit of the company. That's what you mean right? Sole prop is just one person taxed on the profit while we have two.

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[emr]

If we are SCorp, the we would be "employees" right? Then we would need workers comp insurance. In WI, no need to have that if you are the owner of a LLC. I wonder if that would come into play.

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[sotc]

Self employment taxes tend to be much higher than other forms. My wife and I are the share holders which makes the tax scenario easier, not sure how you guys would do the flow through. A good tax consultant would know that. The dividend set up is nice. You guys could pull the profit out of the company as needed.
The comp thing varies, well worth looking into

 

[sotc]

Should be able to find that book locally, I haven't read mine in years but I think it would answer many of your questions. I'd read it before you even meet with a tax person

 

[emr]

Cool. Thanks for the advice. I think I will check that book out.

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