Don't Form an S Corporation Until You Watch This

Electing your LLC to be taxed as an S Corporation is probably one of the most recommended tax strategies for self-employed business owners. However, there are some disadvantages of an S Corp that you should consider before you make the switch.
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Timestamps
LLC to S Corp (0:00)
What is an S Corporation? (1:50)
S Corp vs C Corp (3:38)
Advantages of an S Corp (5:12)
The Major Disadvantage (7:24)
Disadvantage #1 (8:35)
Disadvantage #2 (10:20)
Disadvantage #3 (11:23)
Disadvantage #4 (12:50)
Disadvantage #5 (14:20)
When to Become an S Corp? (15:10)
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Hey, I'm Sean with lyfe accounting. The accounting company that helps you save on taxes and build more wealth. Please be sure to give this video a like and subscribe to our channel so you don't miss out on future videos!
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

[@efrainanaya5671]

I love the fact that you reference court cases because it gives me a point to better understand and actually review how the IRS view and process the case

[@LadyDayK87]

I really appreciate your time stamps. I don't skip through listening but it helps for writing down the important parts I want to remember.

[@REVIVALFitness]

This channel is so good, thank you all

[@teresaurquiagatayag2529]

Court cases= super helpful thank you !

[@jclefbouncyrock]

Great video - thanks for the info!

[@goku9157]

Thank you for the clarification

[@horacejohnson8925]

I appreciate the court cases you use. Very helpful 👌

[@priscillastrickland7304]

Great information. Thank you

[@julianerbil]

holy cow this is so helpful! thank you

[@Trulyb_]

I'm a fan of the court cases. This video was very informative thank you!!!

[@Lucia-Sosa]

Youre honestly the best. Thank you

[@zainabimtiaz676]

well done bro !!!!!

[@dbest4755]

Great Info Thanks

[@caesar5423]

The court cases are very helpful

[@crimecast72]

Definitely interested in hearing more about IRS court cases! Maybe a series? Find ones that set important precedence for today’s tax implications that are most relevant to budding entrepreneurs

[@thedreamnowchannel6976]

@Sean I am loving this info.. I want to know more

[@littledaemon001]

Yes please! (On referencing more IRS court cases). I find it fascinating when you inject precedence like that.

[@rickwilliamsvideo]

I hit the like button 👍🏼

[@FinancialFreedomMadeSimple]

Court cases are very helpful.

[@susanjohnson3468]

Your videos are excellent. I really appreciate the content. You also do a great job visually! Just curious if you are using a program to do these videos or do you hire someone? If you hire someone, I might be interested in hiring them... If you make them - awesome job!

[@davidval7188]

I wish your channel was around 30 years ago. The information is presented In a very understandable way..

[@tylerheldreth4565]

I def love the court cases, makes it more real-world for me and easier to grasp.

[@OvidianHEX_]

Man thanks bro for this video. Looks like my Tax preparers where pushing me to get an S Corp just to increase my bill. This sucks :/ might get a new tax pro lets see.

[@trucker_gainez]

Please keep reviewing court cases

[@nicholasolivas317]

1. In the state of Colorado you can set up an S-Corp as a legal entity. 2. If the S-Corp is not an entity but just a tax election on a tax form as you just said in the beginning of the video. Then why do you need a board of directors? 3. You need to wear a different shirt. Your white shirt is making you blend in with your background.

[@berkleybrannon8578]

In the $200,000 of S-Corp income with 100,000 being reasonable salary and the other 100,000 being distributions, the savings from the Corp are less than $15,300 because if you had 200,000 of self employment income the social security taxes would max out at $147,000 in 2022. You would still take the Medicare taxes of 2.9% as savings. Great video!

[@alexlefkowitz]

Can you expand on 15:00 "scorps have a slighter edge on raising capital than an LLC"? What do you mean by that? Also, I'd like to start an scorp, but I may want to raise VC money someday so should I start as LLC > scorp or ccorp > scorp? Thanks!

[@uriahgreer]

Bruh, this whole video was so dang helpful. Now I know going s-corp is premature for us

[@creed7467]

I know my comment is 2 years to late but yes PLEASE reference tax court cases

[@melbee4848]

I LOVE COURT CASE REFERENCE!!!!

[@LYFEAccounting]

You probably would love this video then : kzbin.info/www/bejne/oH3Xc6VjlrCEY9k

[@SimonSozzi7258]

One major advantage of an S corporation is that it provides owners limited liability protection, regardless of its tax status. Limited liability protection means that the owners' personal assets are shielded from the claims of business creditors-whether the claims arise from contracts or litigation.

[@amandacarter497]

Yes to court cases

[@jasonkash]

Where are you basing your pricing on for your tax services??

[@blec.g7522]

Do you have a course that walk through step by step filing business tax return ?

[@fearmybrand]

What if its a side hustle and you aren't profiting yet? What if there isn't an income yet to pay yourself with?

[@autoart5126]

If the business is new and the company is only making $10,000 profit for the year, with 2 owner operators, what is considered a reasonable salary?

[@SimonSozzi7258]

Of course you could have a C corp and elect not to take distributions and instead collateralize your stake and get loans which are not Taxed.

[@julianerbil]

in an s corp , can you just pay yourself salary and not give out distributions?

[@lHurtYourFeeIings]

I wouldn't say those are disadvantages. Those were literally advantages. Sure you have to pay a reasonable salary which is just a % of corp profit, as compared to paying self-employment tax on the whole thing?

[@SimonSozzi7258]

Doesn't an S-Corp provide Limited Liability Protection anyway?