Benefits of Starting an LLC vs S Corp

[Raymond Hill]

Hello everyone,

So my business partners and I are thinking of starting an S Corp vs an LLC that can be taxed as an S corp. I just wanted to ask what are some of the benfits tax wise and if someone can send me a contact to a CPA that specializes in Real Estate Investments.

[J Scott]

From a tax perspective, the main benefit of an S-Corp taxed entity is that it's only required to pay out a "reasonable" salary to shareholders, and the remainder can be paid as a dividend, which is not subject to self-employment taxes.  In other words, you may be able to avoid self-employment taxes on part of the income that flows through the entity.