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LLC vs S Corporation – What’s the difference?

 

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Most every business start-up has come across the question “LLC or S corporation?”.

While this is a very common question, the response is often different depending on who you are talking to.

It should be noted that an LLC might work for some while an S corporation could be better for others – there is no “one size fits all” approach to entity selection.

In short, here are a few pro’s and con’s for the LLC and S Corporation entity structure:

 

LLC –

  • PRO – Divide profit as members see fit
  • CON – Passthrough income subject to self-employment tax if member has personal liability for debts of LLC or actively participates in trade or business of LLC

S Corporation –

  • PRO – Passthrough income is not subject to self-employment tax. Only employee-shareholder “reasonable compensation” subject to payroll taxes.
  • CON – Only issue single type of stock and must distribute profit based on percentage of stocked owned

Of course there are many more pro’s and con’s for each entity selection – feel free to call us with any questions and will be happy to discuss more (800) 425-0570.

For more related information visit the following links:

http://tiny.cc/xjz22x   IRS: Partners’ Share Of LLC Income Is Subject to Self-Employment Tax

http://tiny.cc/smz22x  5 Common Objections to Forming a Corporation or an LLC

 

 

TAX DUE DATE – Business & Trust/Estate Taxes – September 15th, 2015 – Are you ready?

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September 15, 2015 – This is the last day to file a 2014 calendar year income tax return for your:

  • Corporation
  • Partnership
  • Trust/Estate

Be aware – This due date applies only if you timely requested a 6-month or 5-month extension. If you did not file an extension then there is even more urgency to file your tax return as soon as possible – expect penalties and interest if this is the case, but contact us immediately and let’s get those penalties abated!

Also, you must deposit the third installment of estimated income tax for 2015.

If you need help filing or have questions, feel free to call us today for a FREE initial consultation (800) 425-0570 or email questions to Contact@MrSmartTax.com

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Thoughts on government #Tax

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Mark Twain quotes on government click here

September 17th 6pm-8:30pm Personal Finance and Money Management

personal-financeMr. Smart Tax, Inc. will be presenting an exciting course on the basics of personal finance and managing your money. Learn how to take control of your money and strengthen your financial health whether you are starting out on your own, starting to invest or getting ready for retirement. Call to register today (800) 425-0570 or register online here

Date/Time: September 17th 6pm-8:30pm  (networking & refreshments 6pm-6:30pm; presentation 6:30pm-8:30pm)

Location: Mr. Smart Tax, Inc.
4590 MacArthur Blvd., 5th Floor
Newport Beach, CA 92660

Healthy Workplace Health Family Act of 2015 (AB 1522)

An employee wpaid sick leaveho, on or after July 1, 2015, works in California for 30 or more days within a year from the beginning of employment, is entitled to paid sick leave. Employees, including part-time and temporary employees, will earn at least one hour of paid leave for every 30 hours worked. Accrual begins on the first day of employment or July 1, 2015, whichever is later.

Exceptions: Employees covered by qualifying collective bargaining agreements, In-Home Supportive Services providers, and certain employees of air carriers are not covered by this law.

An employer may limit the amount of paid sick leave an employee can use in one year to 24 hours or three days. Accrued paid sick leave may be carried over to the next year, but it may be capped at 48 hours or six days.

Usage


  • An employee may use accrued paid sick days beginning on the 90th day of employment.
  • An employee may request paid sick days in writing or verbally. An employee cannot be required to find a replacement as a condition for using paid sick days.
  • An employee can take paid leave for employee’s own or a family member for the diagnosis, care or treatment of an existing health condition or preventive care or for specified purposes for an employee who is a victim of domestic violence, sexual assault or stalking.

Employers


Reminder: California Employers Required to Notify Most Employees about Paid Sick Leave

There are several things employers must do to comply with the Healthy Workplace Healthy Family Act of 2014 (AB 1522).

  • Display poster on paid sick leave (Spanish) (Vietnamese) where employees can read it easily.
  • Provide written notice to employees with sick leave rights (Spanish) (Vietnamese) at the time of hire.
  • Provide for accrual of one hour for every 30 hours worked and allow use of at least 24 hours or 3 days or provide at least 24 hours or 3 days at the beginning of a 12 month period of paid sick leave for each eligible employee to use per year.
  • Allow eligible employees to use accrued paid sick leave upon reasonable request.
  • Show how many days of sick leave an employee has available. This must be on a pay stub or a document issued the same day as a paycheck.
  • Keep records showing how many hours have been earned and used for three years.

Retaliation or discrimination against an employee who requests or uses paid sick days is prohibited. An employee may file a complaint with the Labor Commissioner against an employer who retaliates or discriminates against the employee for exercising these rights or other rights protected under the Labor Code. Local offices are listed on our website at http://www.dir.ca.gov/dlse/DistrictOffices.htm.