By Jason Watson, CPA
Posted February 28, 2020
Is your S Corp going to be needed next year, or the year after that? While an S Corp might make sense in the immediate future, the costs and hassles of startup and shutdown need to be amortized or spread out over a handful of years at the minimum. In other words, if your consulting gig might turn into a W-2 job next year, perhaps wait or defer the creation of an S Corp.
Marriage in itself is not a reason to elect S corporation status. But an S Corp is like a marriage- easy to get into, hard to get out. The S Corp election needs to be revoked, the business needs to reclassify itself as an LLC, a final tax return needs to be filed, payroll accounts need to be closed, etc. At times it is easier to shut down the entity and re-light another one.
We are not trying to alarm you or dissuade you, but at the same time many people forget about the back-end issues. Yes, WCG can take care of all this.
|Previous Article||Next Article|
|C Corp to S Corp Problems||Recap of S Corp Downsides|
Taxpayer’s Comprehensive Guide to LLCs and S Corps : 2020 Edition
This KB article is an excerpt from our book which is available in paperback from Amazon, as an eBook for Kindle and as a PDF from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles, click on the fancy buttons below or visit our webpage which provides more information at-