FICA covered by W2, so does S Corp really buy me much?

[John McAuley]

Hey Everyone,

I am mainly a buy and hold investor and have purchased our first 6 properties over the past 5 months.  I had not intended to flip any but am now considering that given the huge equity we have in them.  These are nicer homes that rent in the top range of my market, making it harder to find tenants who can qualify.  So my thought was that instead of a refi on a harder to rent home in my area, flip into two or three lower priced homes that rent well.

My question is on tax treatment. I hold all of these in an LLC currently. I've seen several things recently that indicate for flipping, an S Corp could be better to help avoid/reduce self employment taxes. I currently hit the ceiling on FICA through my W2 job, which is the largest part of self employment taxes. Based on limited research, am I right to assume that the only tax advantage for the S Corp vs LLC is to potentially save or reduce the medicare portion of the SET?  Since I would not be paying anymore FICA anyway, that was my thinking.

I know I should run this by my CPA and I certainly will.  Just asking for some thoughts on this from the team here.  Thanks!

John