Should I be an S-Corp? LLC, PLLC?

Starting off such a comparison is like comparing apples to oranges.

A PLLC, or an LLC, is how your business is formed with the state. An S-Corporation election is made on the Federal level for taxation purposes.

So, if you are already a PLLC or LLC, continue on. If not, our PLLC vs. LLC post will help you identify what decision is best for you.

We’re always asked questions about companies that wish to become S-Corporations in an attempt to save on taxes.In response, the first thing I discuss with clients is if becoming an S-Corporation is going to save them more money than it costs to become an S-Corp.

Until now, you’re most likely a sole proprietor. You file your business on your personal tax return and you (hopefully) pay estimated taxes.

That changes when you make the election to be an S-Corporation. You need to file a separate tax return for the business and you will need to start paying yourself a salary. Both of these usually cost money to do. For S-Corporation clients, we estimate that the tax return and payroll are going to run you around $1,350 a year. This is in addition to the costs of making the election and getting payroll set up, which is estimated to be around $500.

Now that we have an estimate on the additional costs it will take to operate an S-Corp, are you going to save enough?

If your net income before you pay yourself is around $50,000 or higher, it is more than likely worth the additional hassle of making the S-Corp election. There are additional factors as well, such as do you work in a home office, how are you getting your health insurance, and so forth.

Of course, choosing to become an S-Corp is based on your unique situation and does depend on your industry.

TL;DR: Set up an appointment with us if you are thinking about making the S-Corporation election.

PLLC vs LLC

What’s the difference between a PLLC and an LLC?

An LLC is a Limited Liability Company. If set up properly, an LLC will protect your personal assets, such as your house, car, and other personal belongings. Establishing an LLC separates your personal assets from your business assets. If your business fails, only your business assets can be used to settle its debts..

Most small business that want to incorporate form LLCs.

But what are PLLCs, and how do they compare to LLCs?

A PLLC is an LLC for certain industries. If your industry requires you to have a license or certification, this usually means you should be a PLLC. If you are a Private Therapy practice in Washington State you should be a PLLC.

A quick question you can ask yourself is: do I require continuing education each year? If the answer is maybe, you should talk to a lawyer to confirm whether you should register as a PLLC or LLC.

Uhhh…What if I might already be an LLC and shouldn’t be?

Well, we’re always happy to help Therapy clients email the Secretary of State to start the process of changing from an LLC to a PLLC. The Secretary of State will send paperwork to correct this, and you’ll likely just need to fill it out and pay a small processing fee.

TL;DR: If you are a Therapy Practice you should be a PLLC.

TL;DR: Accounting is Closed for Labor Day

In recognition of Labor Day, TL;DR: Accounting will be closed this Monday.

TL;DR is a supporter of a healthy work/life balance, which means taking time away from work during holidays and downtime. Our staff is also given the freedom to work around their personal schedules in a manner that works best for them.

Over the past week, our staff has worked exceptionally hard to ensure all work is completed on a timely basis, but that also means that, this weekend, our time away from work is precisely that.

Over the next three or four days, some of our crew will be attending PAX West in Seattle. Others will be enjoying their long weekend at Bumbershoot, and others still will be sending off summer with family BBQs.

We wish everyone a happy Labor Day weekend and hope you, too, are able to enjoy some hard-earned time off from work.

TL;DR: We are AFK this weekend.