Taxpayers Guide to LLCs and S Corps
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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.
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Taxpayer’s Comprehensive Guide to LLCs and S Corps : 2020 Edition
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