What are the benefits / drawbacks of both? I own one investment property currently, but may join an investment group in the near future. What are the tax benefits / healthcare insurance benefits for both? I will be doing REI full time. I may be “hiring” my parents if There are specific medical insurance advantages to one in particular.
Based on what you have said, a c-corp may be more appropriate.
what’s better for YOU depends on what you NEED.
If you have sufficient cash flow to pay yourself a salary, then S-corp may save you taxes.
regarding insurance for your parents, this will depend more on finding a group policy that will cover everyone. the premiums are deductible to either entity type - makes no difference.
McWagner - I have just noticed your signature line…
Mark Wagner, CPA, LLC
Does it mean that you named your LLC as Mark Wagner, CPA? What an interesting way of naming a company… I wonder if a judge might be slightly more tempted to disregard the LLC if you are using your own name… :O) Like “what do you mean you want liability protection under your LLC? You even named it after yourself… You and the company are one and the same…” LOL :O) Just wondering…
My lawyer does the same thing.
The LLC afforded easier “separation” as separate property in the pre-nup and wills related to my remarriage.
It also had the advantage of keeping my ex-wife from seeing the company income on my personal tax return.
It also allows me a better option for adding a partner should that arise.
It also allows me a better option to transfer some of the practice to my CPA daughter should that arise.
It has also allowed me certain tax advantages, such as a medical reimbursement plan, that are allowed for C-corps (yes, my LLC is currently taxed as a C-corp).
I had to use my name as required by the rules of the Texas State Board of Public Accountancy, which issues my license and governs things like firm names to make sure they aren’t deceptive and protect the public interest.
My interest was not liability protection, since I will always be personally liable for my professional actions as a CPA.
I doubt the judge would disregard the entity, given how it has been structured.
Just in case you were wondering…
Mark - thank you. I was just curious.
It is very common for professionals to name the company in this way.