Tilted Forum Project Discussion Community - View Single Post

gar1976 · 02-25-2004, 09:42 PM

With the declinein personal income tax rates by the tax act of 5/03, S-Corps are probably a very good bet - with limited liability and pass-through taxation.

LLC's would be another good choice, and can be more flexible than an S-Corp should you chose to bring a partner in. S-corps are limited in that they can only have one type of stock, and sitributions must be made pro-rata based on ownership - which can be a pain if you own 75% of the corp, do 100% of the work, and still need to pay distributions to your parter.

Both are easy to set up, and can be done for several hundred dollars. Or yourself if you're feeling adventurous.

Annually, S-Corps file a 1120s form federally and whatever state form is available (Oregon has a 20s). LLC's will file a 1065 partnership return federally, except if it's a single member LLC, at which point the income and expenses can be put directly on the owner's schedule C, form 1040.

Also, should things go bad and you need to liquidate, LLC liquidations are generally tax-free compared to S corps, which is a taxable event.

Check with your state department of revenue about LLC - they vary from state to state.

02-25-2004, 09:42 PM	#6 (permalink)
gar1976 Custom User Title Location: Lurking. Under the desk.	With the declinein personal income tax rates by the tax act of 5/03, S-Corps are probably a very good bet - with limited liability and pass-through taxation. LLC's would be another good choice, and can be more flexible than an S-Corp should you chose to bring a partner in. S-corps are limited in that they can only have one type of stock, and sitributions must be made pro-rata based on ownership - which can be a pain if you own 75% of the corp, do 100% of the work, and still need to pay distributions to your parter. Both are easy to set up, and can be done for several hundred dollars. Or yourself if you're feeling adventurous. Annually, S-Corps file a 1120s form federally and whatever state form is available (Oregon has a 20s). LLC's will file a 1065 partnership return federally, except if it's a single member LLC, at which point the income and expenses can be put directly on the owner's schedule C, form 1040. Also, should things go bad and you need to liquidate, LLC liquidations are generally tax-free compared to S corps, which is a taxable event. Check with your state department of revenue about LLC - they vary from state to state. __________________ Blistex, in regards to crappy games - They made pong look like a story driven RPG with a dynamic campaign.