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Jerry Mohn June 19th, 2005 01:39 PM

S corporation LLC for video production
 
What are the drawbacks and benefits related to taxation?

I have some equipment and start-up expenses that I would like to amoritize plus I would like to add a retirement plan and buy a company car.

I know I should see a CPA but I need to educate myself a little before I see one.

Mike Rinkunas June 22nd, 2005 08:14 AM

Jerry,

For my company, i am a sole membe LLC. This may or maynot be the way to go for you.

however everything i'm about to say here will vary from state to state. I'm based in PA, and after reading what i say here, not only should you check with your CPA, but also a lawyer just to be safe.

I went with an LLC instead of the S corp because there were little extra yearly costs and paperwork.

With an LLC, all profits of the corp are transfered directly to the members, like a sole propeitor. S-corps profits are split among the share holders in the company based upon percentages held. S-Corp also has extra IRS paperwork to fill out and requires yearly (atleast) corporate meetings and corporate records. an LLC does not.

One trade off, currently, atleast in PA, a sole member LLC hasn't held up in court yet as a corporation - no court cases against it last i talked with my accountant yet - single member LLCs are only a relatively recent invention. In theory, everything is the same as an S-corp, but just not proven.

just my 2 cents.
Like i said, confere with both a CPA and a local lawyer that you trust to really find out which is best for you.
~Mike

Jerry Mohn June 23rd, 2005 08:14 AM

Hi Mike, thanks for the input. You can be an LLC and a S-corporation at the same time. Filing as a Sole Proprieter could be done with or without the LLC. LLC stand for limited liability company not corporation. I have a LLC that files the 1120s for s-corporations. LLC is not a factor when filing your taxes. As a SP LLC you can file on your 1040 without additional paperwork but you don't get the same opportunities for write offs as an s corporation.


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