The Difference Between an LLC and an S-Corp | Mark J Kohler | Tax & Legal Tip

The Difference Between an LLC and an S-Corp | Mark J Kohler | Tax & Legal Tip


Hi Mark Kohler here with the two-minute tax and legal tip let’s talk about the difference between an LLC and an s corp now There are so much misinformation out there and just because there’s longer YouTube videos doesn’t mean they’re accurate [moreover] a lot of people think oh, I can just learn about it for a few minutes on the web And then click click with a mouse, and then make a big [mistake], so let me hit the highlights and break down Where you might use an s [corporate] [now] when I do this planning? I like to divide Clients lives into two sides [that] short term and long term short term Long term short term or long term deals this would be ordinary income this would be passive income Ordinary income is like [Commission’s] selling a service or selling a product the passive income would be rent long-term gains capital gains Royalties interest dividends they’re going to be taxed very very differently so what we want to do on this side is Start with maybe a sole proprietorship and then graduate to the s corp when the time is right? That’s the s corporation where money comes in and I do what’s called a salary dividend Split W2 VS. K1 this allows me to save on Fica [Suda] [fudo] workers comp and Save on even obamacare, so the s corp is powerful for ordinary income, but I’m not going to hold assets here That’s where I throw in the LLc the limited liability company is for holding assets doing investments building rental properties and having partners with long term assets Llc’s are great for holding assets, but they don’t save taxes the second place We might use an lLc is on the ordinary income side but with the use of s corpse, so we have an lLC for partners where they each have their own s corporation so that way I can have the tax savings for each partner that have an lLC for partnership protection and Creative planning for allocation of income and expenses so llc’s are great for partnerships, and they’re great for holding assets But folks llc’s again. Don’t save taxes and in some states They can cost you more so bottom line get a consult get some support our law firm is amazing We’ve got five lawyers helping clients all over the country setting up any of these [an] all fit [states] you can either do the cheap legalzoom [setup] route or get the full service of an attorney consult that will design the right entity for You [400] bucks or [800] bucks. So affordable give us a call check out the website below and hope to see on the [backside]. [thanks] If you thought that information was amazing helpful, I have so much more to share with you Please look at the links below and head to my website Mark J Kohler [comm] you can subscribe to my weekly newsletter check out my weekly radio show [I] have my online videos for tax and legal strategies that will save you thousands ways to learn Quickbooks with my fun videos online and also if you enjoyed it, please leave a comment And give it a like and follow me on [YouTube]. I promise that these videos will change your life. Thanks so much

24 thoughts on “The Difference Between an LLC and an S-Corp | Mark J Kohler | Tax & Legal Tip

  1. What a great tip, it was so helpful and extremely informative.  Thank you, Mark.

  2. What's great books that explain the variations of LLC's, S-CORPS, C-CORPS ETC

  3. You're the man Mark Kohler! I need your expertise to help me launch my business. I hope to see you at your upcoming workshop in Philadelphia.

  4. This was absolutely spectacular! Exactly what I was looking for! I want to contact you guys about helping me set up my business 🙂

  5. Short, sweet and to the point! Just perfect!

  6. Greeeting Mr Kohler, I just watched this awesome video but I do not understand what did you mean by "LLC great for assets but it does not save taxes"

  7. Can an LLC be taxed as an Scorp?

  8. Hi there! Great video! I was wondering if you could answer my question.

    I am currently incorporated as a single-member LLC. I have been doing business as an LLC for the last 6 years. I provide IT services to my customers and typically do one contract at a time. I maintain my accounts on QuickBooks "Self-Employed".

    I am about to complete my current contract, and am in negotiations with a new customer. My new prospective customer does business with only S-Corp or C-Corp and not a LLC. I am prepared to re-incorporate myself as a S-Corp with a single shareholder in order to get this new contract, and this would be in June or July.

    Can I therefore have a LLC as well as a S-Corp? Do you see any pitfalls with this situation. I will get future revenues in the S-Corp and none in the LLC. Eventually I may need to close the LLC and use the S-Corp for my future contracts. Do you have any advice for my specific situation?

  9. Mark I just am in the process of forming my entity. I'm a furniture builder/woodworker up and running for 2yrs with no real structure. I've signed up with your firm, weekly & coming to the Sacramento workshop in Sept. I'm ready for the next step (or maybe first step) to my future and hope to hear from you from your initial consultation.

  10. This isn't completely truthful. Every lawyer / accountant knows that an LLC can be taxed as an S-Corp. Having an LLC file Subchapter S will save SE taxes, plus it's much more simple than a conventional S-Corp. With an LLC, you only have to file articles of organization as opposed to articles of incorporation, and you don't have to worry about board of directors or annual meetings. LLC with Subchapter S is the way to go because you have the best of both worlds with tax savings and simplicity.

  11. Great to know; it's true..there are many blogs and vids online that I've viewed which have never spoken to the thing that most important to me while considering set-up of my new business..taxation issues.. This gives me a totally new perspective on how to be taxed less..

  12. Great!

  13. Can you change your entity even if you've only been in business for one year?

  14. For a regular home remodel worker looking create a business always getting paid in checks.. Is it better form a Scorp or LLC.?

  15. Do you have an office in San Antonio, TX?

  16. I've never heard anyone recommend that somebody start out as a sole proprietor. What if the business owner gets sued during that time? Her personal assets (like her house) would be up for grabs. I don't think that's good advice, at least without a warning of the possible consequences.

  17. Thanks for clarifying that

  18. If you're starting a new business, it's better to do LLC since profit is less or in the red. After 2 years, then move to S-corp?

  19. Do you have a office in california?

  20. Hi Mark, thanks for the info, big fan, quick question, planning on creating a LLC for my Amazon business, if I use AB & C as my business name as DBA at Amazon, and I apply for LLC name in California, is there a big difference between AB & C vs AB and C as my business name?

  21. Thanks for the video

  22. Curious about the notion of combining an LLC for asset protection with a "personal" S-corp for tax benefits. Obviously, an LLC can file as an S-corp if the situation warrants, but I've not heard of layering the two like this.

  23. OK, I do have a question. I just started a transportation business on January 2019. I formed the LLC and then setup my EIN through the IRS. I have NOT done any business yet outside of bank accounts and some miscellaneous equipment as a pre purchase to getting started. I’m a 1 owner/employee. Working with brokers I must supply a W9 to them so they can pay me and since I’m a one owner SMLLC I have to provide my SSN which I don’t want as you can imagine. I have a registered agent for the formation of my LLC and a processing agent for my BOC-3. Guess my question mainly is should I call you guys and switch to s-Corp ASAP before I do business since I never want to give my ssn to a broker(s) on the W9? Rather be hidden behind the EIN to the brokers. The IRS says that I can’t use my EIN if I’m a one owner LLC sole proprietorship.

  24. I have a question if I buy a rental property in turn do or can I apply for a business to a corporation? For taxes or would It be necessary? 2) My husband and I been in the 118,000 tax bracket and before the 2018 tax year we paid 3800 federal taxes. 2018 federal tax season 10,500! I’m highly upset at this president! Well anyway I have a 16,18,21 (college student) I couldn’t even write of my then 17 year old. They said after 16 no tax exemption! Wow I tried looking at ways can’t I write him as a extra dependant? Thanks so much in advance and love your channel and I totally understand if you’re too busy to answer these questions I know how busy you must be.

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