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Any advantage forming an S corp for one man indy brokerage?
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PostPosted: Fri Oct 16, 2009 12:38 am   Post subject: Any advantage forming an S corp for one man indy brokerage?  
New here. Been thinking about forming an S corp or LLC mainly for saving on self employment taxes. Would like to know if an S corp or LLC helps. Glad to get to know the site.

Mike from Los Angeles
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PostPosted: Fri Oct 16, 2009 8:48 am   Post subject:   
Well Mike,

I am not a tax consultant but I do know that in CA there is an $800 min tax on an LLC.....so even if you don't make a penny the state will charge you $800. If your already paying more then $800 in taxes its a moot point.

Hope that helps....
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PostPosted: Fri Oct 16, 2009 6:33 pm   Post subject:   
It's my understanding that an S corp will be more helpful than an LLC, but you should prob talk with an accountant.
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PostPosted: Fri Oct 16, 2009 6:51 pm   Post subject:   
I'm not an accountant, but can share my personal experience.

For my agencies, I filed the S Corp status because that entitled the income or loss to "flow" to my personal tax return. When I incurred a loss, the loss was deducted directly from my personal income, therefore, my tax liability was reduced. As I consistently reinvested in the agencies (new equipment, additional locations, etc) I incurred a loss most years.

Do note: a loss for the corporation didn't mean I as the President didn't profit from the business each year.

Now with regards to franchise taxes, that was dependent upon state regulation.
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