Corporation or LLC??

[SodBuster]

Erich, either your making up these answers based on google information or you are being told nonspecific information that has no relevance to your business situation. Being a highly trained CPA myself, I have to believe in the former. It’s ok to admit you know next to nothing about business law and accounting. How could you? Where you born having vast knowledge of these topics, or did you get a higher education specializing in these complex subjects and demonstrating your ability by passing certifications? I think the answer is neither, you mow lawns, prune and mulch.

It's funny you say that Sodbuster. Friday and today I have had to meet with my Certified Public Accountant. I had her read this thread today on my laptop. She kind of chuckled a bit and said "Yes, the LLC is great for the lawn care biz. But so is the S-corp if you have different plans in the future, or higher expectations, or the state doesn't allow one person to start the LLC."

Different plans for the future? Speaking of the future tell me how you can pass on the wealth of your business as an s-corp? What are some of the many drawbacks to estate planning under s-corp tax law? I know them well, but from reading this thread it’s obvious you do not have a clue. Have you ever been told about LLC free transferability of interest? I didn't think so.

She also said you were missing the point that many states actually REQUIRE you to have a partner to form a LLC, which many don't want to do, so they must go S-corp.

Most jurisdictions allow one person LLC's

She also informed me that many states require you to have a set date of when the biz will actually terminate for the LLC. On that date, the biz ends. And if you die, so does the biz.

Erich, hello anybody home? Do the words perpetual mean anything to you? Continuity of life, does that ring a bell?

And she REALLY got a laugh out of your statement.......
"it is not likely that the s-corp form would result in lower self employment taxes unless no tax planning or tax strategies are used."

Again, I don't think you talked to anybody, the conversation is to goofy. No accountant laughs about tax liabilities. Are you sure you talked with an accountant or anybody for that matter. It sounds like more of your layman approach to serious business matters. The way you described your compensation, salary plus dividend is actually saving you a dime in tax liabilities at the expense of a dollar. The joke is on you and you don’t want to admit it.

She laughed because "It actually IS the good tax strategy!" Because over 50% of the money you earn could save at least 15%. That's actual personal spending money.

See statement above.

She thinks you should check up on the recent changes for the S-corp, and wants you to understand that LLC laws vary by state.

Oh really? Gee, you’re smarter than the average lawn maintenance professional. That’s some great advice and wisdom.

BUT, again, she did say that for the AVERAGE lawn care company, the LLC is probably the best way to go. But there are good reasons for the S-corp as well.

Crazy statement.

She didn't say anything about you getting all defensive, but I'm sure she thought about it. Ease up Dawg. People are agreeing here! I'm amazed that you don't see that!

Ignorance is bliss, I must say you are one thick headed dude. I'm going to bill you for my time. Educations are an expensive thing.

[Scaper-S2k]

for the average lawn care company, LLC is 'probably' the best way to go. Then maybe the S-Corp. C-corp's should not be considered.

Uh, see, I said it from the get go!!! Sodbuster, what part of that did you miss in EACH of my posts??? You are actually arguing about nothing, and something you don't even have! I agreed! All I said was that S-corps have advantages as well. And you are calling me "thick headed". Sure thing dude.


I never claimed to be 'all knowing' in this field. No one is. As for you being a "highly trained" CPA? Sorry, I am quoting the CPA I know that does this for a living, each and every day, her entire life. YOU do what I do, not accounting every day.


WHY are you missing the fact that even she said the LLC is good? But there are also benefits to the S-corp. If there weren't, it wouldn't exist.



Everyone is AGREEING in this thread!

By the way, on L&L you said so many things about the S-corp that were totally wrong. Laws have changed my friend, many of them. Luckily I have a highly trained CPA that keeps up with them every day. If you need any help, let me know, I'll ask her.


As for the future? Yeh, I think about it. It's why many LLC's may go up to S-corp's, but S-corp's aren't going down to LLC's. Strange huh?

Again, not sure why you are arguing about something you don't even have, ESPECIALLY when I agreed that the LLC fits most lawn companies.




Wow, this is amazing, but exactly what I would expect. Are you a Democrat by any chance?

[SodBuster]

Very bizarre to say the least. Erich you are miles off course and you might consider getting some other opinions to verify my synopsis of your situation. From reading your posts you are missing out on some important matters. If fact, you are unaware of there existence, and the existence of solutions.

I have not heard anything from you about s-corps that would be of any value. Surely, you did not pay for any s-corp info mentioned in this thread. No way...you paid for these ramblings....none of them make any common business sense. If you don't believe me, get more opinions.

[pride]

Guys,
I thank you all for your advice and you all make good points. I'm still doing my research and some of the best advice came from a friend of mine in Denver, Colorado who runs a very large window company. They are a corporation of course but anyway he said people (consumers) in Denver especially shy away from companies with LLC behind there name, because Limited Liability Company is something that can scare them away, where Inc. looks more professional and sounds good, makes people think of a bigger operation. He did make sense as he said most of the companies there that have LLC behind there name are fly by night operations that you see working out of the back of there beat up truck etc.. no matter what the occupation of self employment, just because it's easier to do does not make it better!

A lot of times more paper work can add up to more customers and it all depends on what you want out of yourself and your business. He also said that S Corp is not a bad idea but although I'm thinking of starting a main corporation and branching out with other business ideas and investments, then you would have to start a C-Corp and branch out to S Corp etc.. The main thing we discussed and a lot like you guys are trying to say, there is advantages and disadvantages to everything, it's whatever best suits your business in your area. I found his advice as he is a business major to be very beneficial and thank you guys for your points!

[Scaper-S2k]

Yes Pride, there ARE advantages and disadvantages to both. I'm glad you have been able to see that. Seems like Mr. Sodbuster pretends that the LLC is the best thing in the world....the only thing in the world......and Gods gift to mankind. And there is no reason for the S-corp....even though thousands and thousands of companies are.

It's amazing that everyone has said that LLC's are definitely worth considering, but Sodbuster is still wanting to argue about something. Why? Only because I point out a few benefits of the S-corp! He doesn't even run one! Imagine that.


Sodbuster, I got back from my CPA meeting at 10:00 tonight. She said if you can't see the benefit of not paying 15% on draws over your reasonable salary, then you are simply arguing just to argue. As for that not making "any business sense"? Whatever you say.

Fact is, you should pay yourself a salary with both. Not much of a tax stragegy in cutting your own salary. If you make a TRUE (as in a real paycheck each week)$100k salary per year with the LLC, you pay 15% on all of it. If you try to hide some of that "salary" in the biz (as a tax strategy).....it's NOT your TRUE spendable salary anymore! But for the S-corp, you can pay yourself $50k salary, then take a $50k draw without a 15% cut. Now THAT is a tax strategy and a TRUE $100k spendable "salary".




YIPPEEEE, again, everyone has stated that the LLC is probably the best way to go for most lawn care companies. But somehow, there is disagreement! Go Figure!!! It's amazing.

[SodBuster]

It’s not likely you will pay fewer taxes by electing s-corp status. Under LLC status, self employment taxes are deductible, fringe benefits are tax free, free of both income taxes and self employment taxes. The LLC ability to shift income, deductions and distributions all add up to a clear advantage. The LLC advantages in estate planning are overwhelming as well.

If your attempt is to save a dime in taxes at the cost of a dollar in taxes than you are accomplishing your objective. Throughout this thread you have made statements about LLC's that are false. You claim these statements were told to you by your CPA. There is no way any of these bogus statements came from your accountant...no way. Only an untrained mind could make those statments.

The only statement your accountant told you is the draw is subject to income taxes and you save on a small portion of self employment taxes on the draw only. What you were not told is you are limited in your ability to apply tax saving strategies by the s-corp status, and your total effective tax will be greater than the same business operating as an LLC.

None of this will get through that thick skull of yours.

[Phil Nilsson]

Observation ... recognizing what is relevant and what is not ... and , at the "time" and place ... relevant ... in a constantly changing world. In other words, stay on a simple, clear course until a course change is needed. Don't make a right turn till you get to corner of the street ...

LLC's are flexible and allow ... EASY ... changes in course ...

Therefore, I declare SodBuster the winner in this debate!

[Scaper-S2k]

There is no winner, because nothing is being debated by Sodbuster. He acts as if the LLC is the only thing to consider. And that is incorrect and single minded. We have ALL said the LLC is probably the best for most lawn companies. But some times it's not even feasible!! Why is THAT so hard to grasp?


It's like everyone saying asprin is great, and then saying ibuprofen is totally worthless! It makes no sense!!

Sodbuster, I agree that the LLC is USUALLY a good choice for lawn companies. I have said that for years. Yours included. I realize S-corps are designed more for companies that have bigger future plans. I have different plans for the future. See, I'm probably half your age and looking 30 years down the road, not just 10.

[Phil Nilsson]

See, I'm probably half your age and looking 30 years down the road, not just 10.

Life is one day at a time ... heck, folks die of cancer under 30, I know a lady that is 98 ... just saw her this morning, went over with a coffee and donuts for her from Dunkin ... have to bang on the door real hard because she's hard of hearing ... 30 years is a long time to look ahead ... for anybody and for SodBuster, from the photo I believe I saw of him (never have seen yours by the way ... please post one) I'd reckon that SodBuster was in his 30's or so. Well anyway he looks in good health and we wish all members and guests live a good long time.

Me? ... LOL ... thought you'd never ask ... unless I fall off my boat and drown first ... I have about 25 years to go ... that number comes from my natural life line inherited ... all my folks lived a long time ... and my "good looks" I got from my Dad! ... ... plus with what modern science does now ... "they" could probably keep me alive forever so that 200 years from now I'd still be posting to this forum? They say if it can be "imagined" then it's possible! ...

Phil

P.S. ... LLC is the way to go and IMHO age and future plans has little to do with it.

[SodBuster]

Tax laws constantly change. Remain flexible and adjust as change occurs. The LLC organization is more able to adapt and benefit from change greater than any other existing entity type today.

[SodBuster]

Sodbuster & Skynyrd at Timber Creek Farm

[andersc1]

Boy, I thought I knew what was going on here in the beginning of this post, now I'm not so sure! Personally I think it would be better to quit the LCO business and go to work at Wal Mart as a door greeter. <grin>

Curtis

[melly-mel]

Yeah, me too....(andersc1)!!!