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9/22/2017 12:11:25 AM
Posted: 8/11/2005 8:42:56 PM EDT
Link Posted: 8/11/2005 9:13:33 PM EDT
[Last Edit: 8/11/2005 9:16:07 PM EDT by xanadu]
Is a single-member LLC

Needs an EIN to file Form 8832, Classification Election, for filing employment tax returns, or for state reporting purposes (8)

Complete lines 1-16c (as applicable).


It was under the EIN HELP button on the bottom of the form
Link Posted: 8/11/2005 9:35:13 PM EDT
[Last Edit: 8/11/2005 9:43:18 PM EDT by PeteCO]
A multi-member LLC is by default taxed as a partnership, by the way. I have no idea why someone would take a corp taxation election rather than just form a Corp in the first place. If you plan to grow, the tax benefits of a C-corp over other entities are substantial.
Link Posted: 8/11/2005 9:47:32 PM EDT

Originally Posted By PeteCO:
A multi-member LLC is by default taxed as a partnership, by the way. I have no idea why someone would take a corp taxation election rather than just form a Corp in the first place. If you plan to grow, the tax benefits of a C-corp over other entities are substantial.



Hmmm... I thought that a C - corp was double taxation, once for the corp and again for the shareholders.

I understood that an S- corp was the best as the gains and losses are passed through to the shareholders and taxed as part of their overall adjusted gross income.
Link Posted: 8/11/2005 9:52:43 PM EDT
[Last Edit: 8/11/2005 9:54:41 PM EDT by PeteCO]

Originally Posted By xanadu:

Originally Posted By PeteCO:
A multi-member LLC is by default taxed as a partnership, by the way. I have no idea why someone would take a corp taxation election rather than just form a Corp in the first place. If you plan to grow, the tax benefits of a C-corp over other entities are substantial.



Hmmm... I thought that a C - corp was double taxation, once for the corp and again for the shareholders.

I understood that an S- corp was the best as the gains and losses are passed through to the shareholders and taxed as part of their overall adjusted gross income.



What's best depends on the situation. Tax-free fringe benefits are there for a C-corp, and you can take part of your compensation as a dividend, which is taxed at 15%. I pay myself as a W2 employee in my C-corp, and above my pay rate I take my compensation in dividends.

LLC's and S-corps allow pass-through income, but lack the tax benefits of a C-corp. It depends on what you're looking for.

If I recall correctly, the EIN application for a LLC should be made as a partnership (or sole proprietorship if a single member LLC), then you can later elect to be taxed as a corp if that works for you. The basic rule is that unless otherwise told, the IRS will ignore the LLC for tax purposes.
Link Posted: 8/11/2005 9:57:22 PM EDT
Here are some C-corp tax benefits from some notes I have:

IRS Section 74 - Yearly longevity bonus
IRS Section 74 - Yearly safety bonus
IRS Section 127 - Tuition reimbursement - This is a big one, and I used my Corp to pay, tax free for my pilot's license, even though my business has nothing to do with aviation. This is because there is no requirement that it be business related.
IRS Section 129 - Child care
IRS Section 79 - Group term life insurance
IRS Section 105 - Personal health insurance reimbursement (NOT just Section 106 medical plan)
IRS Section 162 - Seminars AND related meals and lodging
IRS Section 132 - Physical fitness facility
IRS Section 243 - Dividends received from another corp. held by a parent corp.
IRS Section 132 - De-minimis Fringes
Potentially, Section 119, for home-based businesses.

There is key-person life insurance, non-qualified deferred compensation and profit sharing, and a few others which I may be forgetting. LLC's cannot do income up-streaming which Corps can engage in. I am not at my office, so I KNOW some/many of these may not be applicable only to the Corporation/employee setup, and of course things like the Section 179 deduction are available to all entities. (which is only interesting to those who are considering the benefits of forming ANY entity as opposed to being a sole proprietor).

Finally, the Corporation is the only entity that can determine its own tax year. When you pay your taxes can be as valuable as what taxes you pay sometimes. The Corporation is not a panacea anymore than an LLC is, but there are many situations when it is definitely better, because it is more flexible and has more methods by which to be tax efficient.
Link Posted: 8/12/2005 10:56:45 AM EDT
Hey Medicman, aren't you going to let us select the name of your biz, as is customary and usual here on Arfcom?
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