Looking for some quick advice on business entities.

[sdifox]

inc

 

[Dr. Zaus]

Why? There are LLC advantages over s-corp in certain scenarios, like newly-created businesses.

Because you don't want to pay the self-employment taxes of an LLC.

The rare occasion where you are forced into an LLC don't apply to me as I don't trust equal partnerships.

 

[sactoking]

Because you don't want to pay the self-employment taxes of an LLC.

The rare occasion where you are forced into an LLC don't apply to me as I don't trust equal partnerships.

For me, I don't want to be forced into the FUTA, SUTA, and MBT of an s-corp. My LLC distributes all excess earnings as equity. That equity is subject to the self-employment tax. Since it is equity and not wages I don't owe federal unemployment, state unemployment, or my state modified business (payroll) tax.

If I were to go with an s-corp I'd have to pay myself a "reasonable" salary. That "reasonable" salary would be subject to withholding (which is equal to the SE tax) and it would be subject to FUTA, SUTA, and MBT. Only once my earnings exceeded the "reasonable" salary would I notice any tax savings by not paying SE tax on the dividends. Since the IRS likes to assess s-corp salaries on the high side, and the burden of proof rests on the taxpayer to prove the IRS assessment is wrong, an audit is likely to trigger a delinquency and P&I for an s-corp.

The way I look at it, unless your business makes at least $50,000 more than you need it to, an LLC is safer from a tax standpoint.

The thing is, s-corps don't avoid SE tax, they just shift half the burden to the company which is your company, so you pay it either way.

 

[Greenman]

Hmmmm... my primary goal is to have one main business. Names XYZ.

XYZ will have a number of subdivisions, many which will have nothing to do with each other. When I say subdivision, I really just mean sub-level entities that provide different, unrelated services.

One for Real Estate Photography.

Another for video and photo processing - it can be tied into the real estate photography, but will also provide processing services to other non-related photography types.

Another for solar power or renewable energy.

Another for an application that I'd like to develop.

Another for sustainable housing.

And I want another subdivision devoted to positive social change. Building wells for poor Africans, financing for small 3rd world businesses, etc.

Anything else I decide to take on.

How much capitol do you have available? Looking at that list, I'd say you're going to need at least a million and a half without touching the social divisions.

 

[fuzzybabybunny]

How much capitol do you have available? Looking at that list, I'd say you're going to need at least a million and a half without touching the social divisions.

Obviously this is spanning across years and years.

Real Estate Photography/Videography and the processing are already happening. And without delving into the specifics or of even what I mean by such thing as "sustainable housing," there's no way to even ballpark the amount of capital needed.

 

[nanette1985]

One thing that matters - are you thinking of ever selling any of those businesses? If so, having started and sold many businesses, you want to run it all by a good accountant (and lawyer) to make sure that everything being sold truly belongs to whatever entity is doing the selling. It can simplify what looks complicated to you right now.

Best to you.