Mark Kohler describes an Arizona contractor filing $1.5 million in business income through an LLC. His accountant missed an S-corp election that would have saved over $30,000 in FICA taxes in year one by splitting income into a $150,000 salary and distributions.
Boy it was here in Arizona it was a contractor that was doing home development they had kind of a big crew and they sucked into the LLC concept because a lot of investors and real estate developers think oh all I need is an LLC and they had this old school accountant that had been around forever and I think they literally forgot to just talk about the S corp I don't know but this client was netting 1.5 mil on a schedule C. Now I know some of you are like well that's obvious oh my gosh that should have been an S corp he wasn't and we see it all the time so anyway we put him on salary at 150 not a big deal he had a whole management team he was golfing one day a week yada yada we felt reasonable comp was fine at 150 when we finished that tax return that first year savings of over $30,000 in FICA you think that's a game changer? It was.
The secret to managing your family's future #financialfreedom #estateplanning #shorts
Moving Property to an LLC: What They Don't Tell You #realestate #investing #tips
