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Tax Information With A Mother's Touch
Published by Eva Rosenberg, MBA, EA
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Tax Information With A Mother's Touch Published by Eva Rosenberg, MBA, EA |
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» From: Pearland, TX Dear TaxMama: I wish to incorporate my business but I am having a hard time deciding on a LLC or a S Corporation. I've been reading that S Corp allow for more generous tax benefits such as deducting life insurance and 401K plans. I currently do not have any employees except myself. My question is do you have the same tax benefits witha LLC such as deducting life insurance and 401K formation? Shantel  I am never sure why anyone would chose an LLC. One of the big disadvantages is, if you treat it like a Schedule C business, or a Partnership, you will be paying 15.3% Self-Employment taxes on your profits. (That's Social Security and Medicare) In an S-Corp, once you take a reasonable wage, you get the rest of the money without that burden. There's a new investment product that debuted just this year. I think they call it a Uni-K. It's a 401(k) plan for business owners who have no employees. You can put large sums of money away, without the high fees of traditional 401(k) plans AND you can borrow up to 50% of your desposits (up to $50,000). You can use that in either vehicle. You've got several more complex issues. Please, sit down with a good, local tax pro who can sort out all the issues, including medical insurance coverage, etc. and see what works best for your situation. Don't do this yourself. Please. Good luck. Best wishes, Eva Rosenberg Your TaxMama  |
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| Library of Congress - ISSN 1532-0790 Copyright © 2000-2003 - Eva Rosenberg |
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