Main Street Business #559 Retroactive S-Election for 2024: Why & How
Jan 21, 2025
21:55
In this episode of the Main Street Business Podcast, Mark J. Kohler and Mat Sorensen share powerful insights on why converting your LLC to an S corporation is a game-changer for tax savings. They discuss the crucial tax advantages, the importance of structuring income properly, and walk you through the filing process. Find out how you could potentially save $7,000 or more with this strategic business move.
Here are some of the highlights:
- Mark emphasizes how LLCs do not save taxes and explains the process of turning an LLC into an S corp.
- Discussion on the difference in tax rates between LLCs and S corps, with S corps allowing for lower self-employment tax.
- Mat and Mark cover the importance of allocating income to FICA wages and the potential savings.
- Mark outlines the three-step process for making a late S corporation election, including filling out form 2553 and referencing revenue procedure 2013-30.
- Mark explains the workaround for the first year, including claiming compensation on both the 1120s and Schedule C.
- The benefits of the S corporation strategy for business owners and the potential annual savings.
- Need for proper health insurance premium write-offs and the overall benefits of the S corporation strategy.
- Why S Corps should avoid taking the Qualified Business Income (QBI) deduction when filing taxes.
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