Is Your LLC Lower Your Taxes?

Are you SAVING TAXES with your business entity?

An LLC does NOT do this!!

You might need to consider an S-CORPORATION.

The time to decide for 2023 is NOW!

So what is an S-Corp?

The general idea is to save taxes!

⁣

More specifically...the goal is to reduce Self-Employment (SE) Taxes.⁣

⁣

If you are the sole owner of your business...

⁣⁣

...switching from Sole Proprietorship to an LLC will NOT reduce your taxes.⁣⁣

⁣⁣

However...if you elect the tax status of “S-Corp”...⁣⁣

⁣⁣

...there is a potential for tax SAVINGS!⁣⁣

⁣⁣

What are Self-Employment (SE) taxes?⁣

⁣

SEs = Social Security and Medicare taxes⁣⁣

⁣⁣

These taxes often get overlooked. ⁣⁣

⁣⁣

With an S-Corp you pay SE tax on your salary ONLY!

You do NOT pay SE taxes on all of the other profits of the business.

Brief example:

Your business has $100,000 of PROFIT (not revenue...PROFIT)...

You could split that profit into:

• $40,000 W-2 Salary to yourself

• $60,000 Profit as "Owners Draws"

The $40,000 is hit with "ALL" the taxes...SEs, Federal, State, etc.

The $60,000 avoids the SEs...unfortunately you still owe Federal, State, etc.

But here's the important part...

...SE taxes are as high as 15.3%...so reducing this can be BIG TAX SAVINGS!

This is a very brief overview. ⁣⁣

⁣⁣

There are many rules and scenarios that will vary for each business. ⁣⁣

So why is the time to decide...NOW?

Because the IRS deadline to make the election is 3/15/23!

So this is the time to chat with your advisors and see if 2023 makes sense to switch.⁣

Important Reminder: ⁣

• There are typically higher costs with running an S-Corp so make sure the tax savings justify the extra costs. ⁣

⁣⁣

Please consult a qualified tax professional to learn if its the right strategy for your business. ⁣⁣

If your advisor has not brought this up to you...

....SCHEDULE A CALL WITH ME today!...

...we can help you determine what is best for your business.⁣⁣

⁣

Best

Pat

𝘋𝘪𝘴𝘤𝘭𝘢𝘪𝘮𝘦𝘳: 𝘛𝘩𝘪𝘴 𝘪𝘴 𝘮𝘦𝘢𝘯𝘵 𝘵𝘰 𝘣𝘦 𝘦𝘥𝘶𝘤𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘰𝘯𝘭𝘺. 𝘛𝘩𝘪𝘴 𝘪𝘴 𝘯𝘰𝘵 𝘢𝘥𝘷𝘪𝘤𝘦 𝘧𝘰𝘳 𝘺𝘰𝘶𝘳 𝘴𝘱𝘦𝘤𝘪𝘧𝘪𝘤 𝘴𝘪𝘵𝘶𝘢𝘵𝘪𝘰𝘯. 𝘗𝘭𝘦𝘢𝘴𝘦 𝘴𝘱𝘦𝘢𝘬 𝘵𝘰 𝘢 𝘲𝘶𝘢𝘭𝘪𝘧𝘪𝘦𝘥 𝘵𝘢𝘹 𝘢𝘯𝘥 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘱𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭 𝘣𝘦𝘧𝘰𝘳𝘦 𝘮𝘢𝘯𝘺 𝘤𝘩𝘢𝘯𝘨𝘦𝘴 𝘵𝘰 𝘺𝘰𝘶𝘳 𝘵𝘢𝘹𝘦𝘴 𝘢𝘯𝘥 𝘧𝘪𝘯𝘢𝘯𝘤𝘦𝘴. ⁣⁣