Become A S-Corp To Save On Taxes
Avoid double taxation, and reduce the amount of self employment (Medicare & Social Security) taxes. If you're a sole proprietor, or single member LLC, in addition to your income taxes, you're subject to an ADDITIONAL 15.3% self employment tax! Once you began to net $35,000-$40,000 annually, you may need a S-corp!
Cut Self Employment Taxes
Become A S-Corp To Save On Taxes
Howard Tax Prep LLC often works with Chicago residents that have to pay self-employment taxes. Although we are a nationwide tax firm, because our office is located in the South Loop of Chicago, we attract many Chicago tax preparation clients that need to lower their self employment taxes.
If you are a sole proprietor, a 1 member LLC, or a general partner in a business, you know that the 15.3 percent self-employment tax can eat up your profits in a hurry. For example, let’s assume you operate a sole proprietorship and you earn $100,000 of net income. You must report your income on Schedule C of your tax return, which creates a self-employment tax liability of $14,129.55, in addition to your personal income tax! In order to lower self-employment taxes some self-employed Chicago residents have our firm apply their business for the IRS Subchapter S taxation status.
What Is an S Corporation?
The Subchapter S Corporation is a special IRS election that has to be requested during a very narrow 75-day window of time that begins on the day the business owner forms the corporation or LLC. Many of our self-employed Chicago tax clients choose to keep their legal entity as a corporation or a LLC, but have their taxable entity become an S corporation.
For federal tax purposes, your S corporation is a pass-through entity, meaning that the corporation’s income, deductions, and tax credit items are passed through to you, the shareholder, on a Schedule K-1. For some business owners, this is the best of both worlds: liability protection with personal taxation.
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S-Corp Creation & Maintenance Plans
S-Corp creation package no existing LLC or C corp $975
INCLUDES LLC STATE REGISTRATION FEE! Fee paid to the state of Illinois, (or your resident state) for the privilege of forming an LLC/Corporation in that state. –INCLUDES STATE FEES FILING FEES OF UP TO $175. STATE FILING FEES ABOVE $175 WILL NEED TO BE PAID BY THE CLIENT.
HOWARD TAX PREP LLC STARTER ENTITY CREATION PACKAGE.
Includes up to 30 name searches in the State databases. Preparation & filing of Corporation Articles of Incorporation, or LLC Articles of Organization.
Federal Tax ID number.
Sample Bylaws/Operating agreement.
*Toll free number or virtual mailing address for 30 days.
IRS S-CORP ENTITY REQUEST. Preparation, and filing of documents required to request S-Corp taxation status from the IRS. In order to have your business recognized as an S-Corp, you must request & receive confirmation of S-Corp taxation status from the IRS within a certain time frame.
FEDERAL, STATE, & COUNTY QUARTERLY PAYROLL TAX RETURN REPORTING & FILINGS FOR TAX YEAR. DOES NOT INCLUDE THE PAYMENT OF THE TAXES! Client’s must register an account that allows them to make the required tax payments, or hire us to make the payments through our monthly payroll service. We will prepare and file the required quarterly federal & state payroll tax returns. Service also includes a reasonable compensation report based on tax court cases, revenue rulings, industry standards, and reasonable compensation reports.
IRS COMPLIANT EXPENSE REIMBURSEMENT PLAN & TRANSACTION LEDGER. In order to take advantage of TAX FREE NON- REPORTABLE INCOME, you must have an expense reimbursement policy that adheres to the Internal Revenue Service (IRS) and Department of Labor guidelines.
S-Corp creation package existing LLC or C corp $625
IRS S-CORP ENTITY REQUEST.
Preparation, and filing of documents required to request S-Corp taxation status from the IRS. In order to have your business recognized as an S-Corp, you must request & receive confirmation of S-Corp taxation status from the IRS within a certain time frame.
IRS COMPLIANT EXPENSE REIMBURSEMENT PLAN & TRANSACTION LEDGER. In order to take advantage of TAX FREE NON REPORTABLE INCOME, you must have an expense reimbursement policy that adheres to the Internal Revenue Service (IRS) and Department of Labor guidelines.
FEDERAL, STATE, & COUNTY QUARTERLY PAYROLL TAX RETURN REPORTING & FILINGS FOR TAX YEAR. DOES NOT INCLUDE THE PAYMENT OF THE TAXES! Client’s must register an account that allows them to make the required tax payments, or hire us to make the payments through our monthly payroll service. We will prepare and file the required quarterly federal & state payroll tax returns. Service also includes a reasonable compensation report based on tax court cases, revenue rulings, industry standards, and reasonable compensation reports.
Annual S-Corp Maintenance $995 + Bookkeeping Cost
COMPLIANCE FILINGS. Includes preparation & filing of annual report and state filing fee.
ANNUAL INCOME TAX RETURN FILING. S-Corp Annual Income Tax Return Preparation, K1 issuance, & income return filing. Does NOT INCLUDE personal return tax preparation or filing.
FEDERAL, STATE, & COUNTY QUARTERLY PAYROLL TAX RETURN PREPARATION & FILINGS FOR TAX YEAR. DOES NOT INCLUDE THE PAYMENT OF THE TAXES! Client’s must register an account that allows them to make the required tax payments, or hire us to make the payments through our monthly payroll service. . We will prepare and file the required quarterly federal & state payroll tax returns. Service also includes a reasonable compensation report based on tax court cases, revenue rulings, industry standards, and reasonable compensation reports.
BOOKKEEPING.
DIY, or subscribe to our monthly bookkeeping cost. Should you elect to perform your own bookkeeping, we request that you take the Howard Tax Prep LLC small business beginners bookkeeping course ($149 for clients, $199 for non-clients), or an approved provider bookkeeping course.
Annual Quarterly Payroll Report Filing. Included in annual package, or stand alone pricing at $245
WHAT DOES IT DO? Prepare and file IRS MANDATED quarterly payroll reports, and quarterly state payroll taxes. DOES NOT INCLUDE THE PAYMENT OF THE TAXES! Client’s must register an account that allows them to make the required tax payments, or hire us to make the payments.
WHAT WILL IT SAVE YOU? Save over $115 per year over the average cost of a monthly payroll service that charges $29.95 per month plus $4 per employee.
WHY DO YOU NEED IT? COMPLIANCE. IRS S-Corp laws mandates that a S-Corp owner pay themselves a reasonable salary before distributing dividends, which means that payroll taxes will be due. Taxpayers are also required to make estimated tax payments if their expected tax liability is $1,000 or more. This package registers your company with all taxing authorizes, and ensures that you will be able to access a system to make your required payroll and income tax payments. DOES NOT INCLUDE THE PAYMENT OF THE TAXES! Client’s must register an account that allows them to make the required tax payments, or hire us to make the payments.
IRS compliant Corporate reimbursement plan. Included in annual package or stand alone at $225
WHAT DOES IT DO? ALLOWS THE S-CORP TO TAKE BUSINESS DEDUCTIONS WITHOUT YOU HAVE TO RECOGNIZE THE INCOME.
Allows S-Corp employees (you) to take advantage of TAX FREE NON-REPORTABLE INCOME. In order to take advantage of TAX FREE NON REPORTABLE INCOME, you must have an expense reimbursement policy that adheres to the Internal Revenue Service (IRS) and Department of Labor guidelines. Includes: IRS compliant corporate reimbursement plan; Employer & employee plan agreement; Classification of plan; IRS compliant reimbursement tracking ledger. Includes optional software recommendation for employee expense capture and reimbursement payments.
WHAT WILL IT SAVE YOU? SAVINGS:
ON AVERAGE MOST CLIENTS SAVE A MINIMUM TAX DEDUCTION OF $12, 000. Figures are conservatively based on your fair market rent in your area, and estimated mileage for your profession.
WHY DO YOU NEED IT? COMPLIANCE: IRS S-corp laws mandates that a S-corp owner pay themselves a reasonable salary before distributing dividends. This package registers your company with all taxing authorizes, and ensures Federal & State legal compliance.
Solo 401K creation for 1 member LLC, C-Corps, & S-Corporations. $375
WHAT DOES IT DO?
· Allows you to exclude income from currents years’ taxes,and defer the income for taxation at a later time. Build your retirement income, and maintain emergency access of the funds’ assets (up to 50%) through loans.
WHAT WILL IT SAVE YOU?
· You will be able to defer up to $57,000 of taxable income through a combination of employee & employer contributions. Those age 50 or higher can defer up to $63,500 through a combination of employee and employer contributions.
WHY DO YOU NEED IT? Retirement plans are an important element of a tax reduction plan.
· Retirement plan accounts are a fundamental element in any major tax reduction plan. Although a traditional IRA may be a good choice for some, if you need to access your money for any financial hardships, you will not have any available loan options like you would with a 401k plan. Additionally, clients that are able to contribute money to retirement accounts, should look into deferring income not only into a 401k, but also a Roth IRA (preferably self-directed..