• December 2019
    M T W T F S S
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Why would a LLC prefer to be taxed as a S-Corporation?

To dovetail with the other posters’ comments,

LLCs are often avoided in favor of the S Corp structure due to how owners income from the entity are taxed. Single member LLC owners are required to pay self-employment tax on LLC income generated in the LLC since they are considered a business owner. In other words they burdened with making quarterly estimated tax payments to the IRS. In contrast, an S corporation owner who performs more than nominal services for the corporation is treated as an employee for tax purposes which allows for normal employ,et tax deductions. Further these individuals are also considered an owner and can take any remaining profits from the company in the form of dividends which are which are taxed at a lower rate than income.

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