1099/LLC/SCorp- Tax Advantages

[Kristen Chapin]

I have an interesting situation and looking for advice. I have contacted my CPA but am still really confused as to the best option so here’s the story.

I work as a licensed 1099 contractor in real estate. You can pretty much call me a “Showing Assistant.” That’s pretty much all I do and get paid to tour houses with clients of my brokerage.

I was also offered a 1099 position for my “other career” as a Recruiter. So now we have 2 1099’s and the self employment tax.

To make matters more complicated, I am an investor and changing my strategy from rentals (all in my personal name with a policy for protection) to wanting to fix and flip houses. For financing, I was told (and for liability) to create and LLC.

My CPA mentioned to possibly create and SCorp and run both my 1099s there as well as the business and well as some other options.

I am looking for advice on how to best handle this tax wise. I have done research and spent time with a CPA but think I am more confused.

Does anyone have any thoughts on how to best make this work?

I appreciate your time and response.

[Daniel Hyman]

@Kristen Chapin

The S-corp does provide tax savings, but depending on your bottom line, the tax savings may be blown on extra accounting and payroll fees. You might benefit from the new 20% QBI deduction without having to elect s-corp status. I would drill down on that with your CPA before creating new entities that may or may not be advantageous tax-wise.