S Corp with 100% ownership of LLC

Forum|Forum|1 year ago
February 19, 2025
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1. My husband has recently established his LLC, and he holds 100% ownership. He is considering filing for S-Corp status for tax purposes. However, we would appreciate your guidance on whether it would be more advantageous to remain as a single-member LLC or to elect S-Corp status.

2. As an LLC-S-Corp, what percentage of the total income would be reasonable to allocate for his salary?

Thank you for your advice.

AmeliesUncle

1) Without knowing your ENTIRE situation, business goals and retirement goals, unfortunately nobody can give you a good answer to that.

2) Salary is not based on a percentage of income, it is based comparable pay for the work performed. If he is the only worker and if it is a service-based business, it is likely that a very high percentage of the profit would be for the 'work' that he performs for the business.

This is really something that needs to be discussed with a GOOD tax professional that can analyze your ENTIRE situation and discuss the many potential cons of the S-election.