T-Shirt Forums banner
1 - 9 of 9 Posts

·
Registered
Joined
·
21 Posts
Discussion Starter · #1 ·
Can someone please help me, I am undecided if I should stay as a LLC or change over to a C-corp? I understand C-corp could have double taxation, but only if dividends is declared. As a C-corp I can offset the double taxation to buy equipment, expenses and receive a higher salary. Is this correct?
 

·
Premium Member
Joined
·
2,443 Posts
Go with an S-Corp status to avoid the double taxation and it's much easier to deal with the taxes at the end of the year over being a C-Corp. LLC's while are fine were originally designed for real estate ventures and trucker's who are "owner operators".
 

·
Registered
Joined
·
4,176 Posts
For most small businesses there isn't much practical difference between a Sole Proprietorship, LLC, and S--other than the protection of your personal (non business) assets from lawsuits with LLC and S. Check with your state, as the costs and details vary. If you don't have an accounting department, you probably won't benefit from a C.
 

·
Registered
Joined
·
9,722 Posts
First of all, forget about double taxation. When you get big enough to have that problem you will have enough money to not worry about it.

A C-Corp is the only recognized entity by the federal government. Some things you can do with a C-corp that you cannot with any other entity are:
  • Have a fiscal year end in any month of the year
  • Have unlimited cash and non-cash non-taxable benefits
  • Have all the benefits and protections of a person

That is just a few of the things, there are many more.
You can read more here: Corporations
 
  • Like
Reactions: Ice Titan

·
Banned
Joined
·
517 Posts
If you ever plan on taking on an outside investor you'll need to be an s/c corp as well. I would consult a, accountant or lawyer based on your needs since it will be worth a few hours with them in the long run.
 

·
Registered
Joined
·
476 Posts
i recently got consulted to changing my s-corp to c-corp by my accountant. the difference between the two is s-corp is combined with your personal tax. the downfall is up to 15% tax more towards your taxes. you are also viewed to be audited over time if you resell and have full time job. with C-corp you are two identities which taxes are separated. s-corp is great to startup businesses from the beginning but change it after 2 years so you don't get looked to get audited if you also work fulltime somewhere else.
 

·
Registered
Joined
·
132 Posts
i recently got consulted to changing my s-corp to c-corp by my accountant. the difference between the two is s-corp is combined with your personal tax. the downfall is up to 15% tax more towards your taxes. you are also viewed to be audited over time if you resell and have full time job. with C-corp you are two identities which taxes are separated. s-corp is great to startup businesses from the beginning but change it after 2 years so you don't get looked to get audited if you also work fulltime somewhere else.

Should someone just consider doing a c-corp now vs later? I am in this boat, so i'm looking into which one to do. I live in Colorado so i'm looking into CO rules and restrictions. Just curious and would like your advice.
 

·
Registered
Joined
·
9,722 Posts
Do a c corp from day 1 and save yourself the headache later on.
 
1 - 9 of 9 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top