Can I avoid taxes by filing as an S corp? 3 Answers as of April 19, 2011

As a 1 member LLC, I want to take advantage of the tax treatment that an "S" corp entitles me to. Is this a wise move or should I just stick with the LLC and not file form 2553. I want to pay myself a reasonable salary, then take distributions to avoid the employment tax, thereby saving a significant amount in taxes.

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David Hoines Law
David Hoines Law | David Hoines
Either gets you to the same place, but an LLC is probably better.
Answer Applies to: Florida
Replied: 4/19/2011
Steven J. Fromm
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
These are questions you should have asked BEFORE you formed an LLC. Now, to effectuate this change you must file a Form 8832. Even with this election, you still need to pay yourself a reasonable salary. The IRS has increased their policing of this area so you need to be prudent here in the allocation of salary and net income passed through to you as an S shareholder. In any event, you need to talk with a tax attorney before you do anything.
Answer Applies to: Pennsylvania
Replied: 4/19/2011
Givner & Kaye
Givner & Kaye | Bruce Givner
The question you are asking requires an analysis of your (i) facts and (ii) goals and objectives. It is not a simple "yes or no" question. Hire someone competent and pay for good advice.
Answer Applies to: California
Replied: 4/19/2011
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