S Corp vs. C Corp vs LLC

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Mobiaz

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Just a question for those more experienced. The group I just hired on with requires you to form a corporation for tax purposes and I am unsure of the benefits of each (S Corp vs. C Corp vs LLC). I know that it is complicated, but if anyone has advice it certainly would be appreciated. Thanks for the help.

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The majority of anesthesia providers are S corp. LLC can be structured into many taxing entities.

Of the three, C corp is the least desirable for anesthesia providers. Many because of "double taxation" first on the business end and than on the personal end.

With me, I am an LLC but I "elect S corp status" so I am treated for taxation as an S corp.

Seriously the tax savings with S corp compared with just plain good schedule C (sole prop) is very little in my opinion when you factor you money you pay your account to file business taxes quarterly, payroll etc.

The only reason I still do S corp status is cause I can pay my non working wife a salary and open up a "safe harbor IRA" where I can contribute $49K for myself and $21K for my wife.
 
Just to add, the other reason to form a corporation is really for legal protection because the corporation creates a "shield" from liability although those shields from time to time are broken down by the lawyers.

You will get the hang of it soon. I've been self employed for almost 7 years and have lot of experience.

Although with a non working wife and kid now, I am actually thinking about going back to straight W2 with health benefits because health care costs are skyrocketing for families. It literally costs me almost 8K in premiums plus another $6K in deductibles for health care expenses last year.

But if you are single, you usually don't have to worry about health care costs like I do with a family.

By law, you are really supposed to add back the health premiums back onto the W2 wages you pay yourself as a S corp and that's taxable. You deduct it from the business side.

But lots of people cheat on this matter...oh...I can just go on and on about business deductions and taxes.
 
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Just to add, the other reason to form a corporation is really for legal protection because the corporation creates a "shield" from liability although those shields from time to time are broken down by the lawyers.

You will get the hang of it soon. I've been self employed for almost 7 years and have lot of experience.

Although with a non working wife and kid now, I am actually thinking about going back to straight W2 with health benefits because health care costs are skyrocketing for families. It literally costs me almost 8K in premiums plus another $6K in deductibles for health care expenses last year.

But if you are single, you usually don't have to worry about health care costs like I do with a family.

By law, you are really supposed to add back the health premiums back onto the W2 wages you pay yourself as a S corp and that's taxable. You deduct it from the business side.

But lots of people cheat on this matter...oh...I can just go on and on about business deductions and taxes.

Wow...only $8k for health insurance?! I have a family of 6 and pay over $18k plus around $5k in premiums. I gotta get on your insurance plan, man.
 
Not too sure about that wife 401k strategy either, but I'm no accountant. Seek legal advice in the state that you work in regarding optimal setup on incorporation.
 
Wow...only $8k for health insurance?! I have a family of 6 and pay over $18k plus around $5k in premiums. I gotta get on your insurance plan, man.

Damm, your health insurance is expensive but you have a family of 6 while I have family of 3...

Family insurance sucks alltogether especially since I have to keep OB rider (they don't offer OB rider's anymore for the self employed with Obama's health care reform bill)...they don't even offer child only plans because of Obama/Reid/Pelosi since they eliminated the preexisiting condition from kids (insurers think some will just not pay for their kids insurance until they get sick and will than immediately sign up for the plan if their kid break a leg/cancer diagnosis and save on the premiums).

I used to "make a profit" from my health insurance plan being single with my health insurance. Dirt cheap like $75 a month. I got to write off the entire health premiums as a Schedule C PLUS got a $2500 HSA deduction from taxes.
 
Is it worth having a lawyer set this up, or is something like leagalzoom.com a viable option. Have been told it can cost as much as $1,000 to have someone do it for me.
 
Is it worth having a lawyer set this up, or is something like leagalzoom.com a viable option. Have been told it can cost as much as $1,000 to have someone do it for me.

It's rather easy to set up a corporation. Get TIN from govt site. Go to your states small business site for instructions to register your business.

Just use google and search for instructions since each state is different. But TIN is super easy.

Since you are new, once you set up your business name and address I would recommend getting a CPA to do your payroll, estimated and quarterly or monthly filing until you can figure out yourself.
 
Doesn't this group that you are joining have professional resources that you can use? As for your question: frugality is admirable and will serve you well, but going cheap on this is penny wise pound foolish.
 
Yeah the group has people they recommend, but very expensive. I think I may have to just bite the bullet and pay. Just starting out is not cheap on a fellow salary (moving / disability insurance / malpractice insurance / selling a house upside down 20k / starting to add up). Anyway thank you everyone for the advice.
 
Just a question for those more experienced. The group I just hired on with requires you to form a corporation for tax purposes and I am unsure of the benefits of each (S Corp vs. C Corp vs LLC). I know that it is complicated, but if anyone has advice it certainly would be appreciated. Thanks for the help.

The supposed advantage of s corp to pllc is the many years of legal history which more clearly seperates your personal and business identities. That being said, the pllc is most certainly safe and a whole lot easier to set up, also does not require a lawyer.
 
The supposed advantage of s corp to pllc is the many years of legal history which more clearly seperates your personal and business identities. That being said, the pllc is most certainly safe and a whole lot easier to set up, also does not require a lawyer.

My understanding of MD PC (S corp) vs PLLC is that MD PC protects you from your own liability, the PLLC protects you from your partner's. If you have no partners, you only need to be an MD PC. PLLC doesn't add anything. I'm not an expert on this, but I was working on setting up my own practice last year and went through this with two different accountants and a lawyer.
 
My understanding of MD PC (S corp) vs PLLC is that MD PC protects you from your own liability, the PLLC protects you from your partner's. If you have no partners, you only need to be an MD PC. PLLC doesn't add anything. I'm not an expert on this, but I was working on setting up my own practice last year and went through this with two different accountants and a lawyer.

No corporate structure protects you from your own professional liability, i.e. malpractice. Some of the above may protect you from your partner's professional liability or your other liability ,e.g. someone slips and falls in front of your office building, your partner sexually harasses an employee, etc.
 
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