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Can you guys share any benefits or negatives about S-corp versus regular corporations for a small business? If I don't pay myself a salary, is it beneficial to have an S-corp?
A S-corp is a pass-through entity and the benefits/negatives depend on what you're doing. There is really no way to answer this generally, it depends on the details.
Can you guys share any benefits or negatives about S-corp versus regular corporations for a small business? If I don't pay myself a salary, is it beneficial to have an S-corp?
Are you planning on living off of draws from the accumulated earnings of your proposed S Corporation?
The IRS would frown upon this, you always need to pay a reasonable salary if financially able to do so.
S Corporation passes through, limits legal liability, and the earnings will be reported via a schedule k-1.
Losses in an S Corporation are only deductible as long as you have positive accumulated earnings (AAA).
I can't afford a local CPA until I get actual profits. At any rate, thanks for the feedback, guys.
I'll keep the regular corporation and pay myself dividends. If there are any problems I'm sure I'll get to learn the correct method at tax time.
If that is the case and logic you really should rethink your plan or can it all together. That mentality of taking the gamble is a perfect setup for disaster.
Pay a bit now or pay tons more in fees and fines later.
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