Carlton explains a tax strategy where an S Corp pays an LLC management fee instead of putting children directly on payroll, claiming it avoids payroll taxes and child tax returns. The advice is framed as what professionals do versus what rookies do.
Rookies use S Corps for placing children on payroll. That's why we don't do that. I would rather set up an LLC management company, place the children on payroll through that llc, have that S Corp pay the LLC a management fee, and then I'll pay the children out through that llc. That way I don't have to pay payroll taxes and the children don't have to file a tax return. This is how you do it without causing tax.
I don't know if this advice is legit, but here's how. Way for our minds to understand, right? Rookies do this, professionals do this. It's this classic us versus them, right? Number two, he's keeping it super high level. Okay, so a lot of accountants, they would way overcomplicate this. To be honest, Carlton, he could have kept it a little bit simpler, but he explained this very complex strategy in like 18 seconds, which is not an easy thing to do. And then third, I mean, he's just super handsome. Wait, did I say that? Want to grow your accounting firm? Follow for more.
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