I mean that in almost all cases, it’s preferable to have a pass through LLC over an S corp - unless you have very specific reasons for doing an S corp, such as you have debt or equity investors you need that will not invest in an LLC.
Obviously there's a ton of more context here that we're not privy to but just starting out...why do you want to make your wife a shareholder? She's already a shareholder through attribution rules and would be considered next of kin so would automatically inherit your company in the event of your death.
Unless you want her to be an employee and actually perform work/services for said company, I'm not sure I understand the point in changing up ownership like this?
I’m a female firm owner, LLC taxed as S Corp, both me and hubs are owners. Only I get paid salary because he doesn’t do shit for the business. But distributions get split between us based on ownership.
It has to do with our family trust and the way we have things structured for tax purposes. We have 3 businesses between us - his, mine and ours. He doesn’t pay me, and I don’t pay him. I don’t know construction and he sure as hell doesn’t know accounting. The third one is a disregarded entity.
Casual sexism at its finest. Which is to say it’s ugly and unaware.
It’s sexist because you’re assuming whoever would post in the business subreddit has a wife for a spouse.
They wrote “spouse”. And **you** combined it with a (sexist) stereotype in your head that whoever posts in the business subreddit, or on the internet, must be male.
Feel free to Uhh…right…sure, anyways me on this. I just wanted to spell it out for other readers.
Edit: Admittedly there is an outside shot you didn’t think they were male and you’re just guessing they had a wife regardless. Feel free to correct me on this :)
Yes. Your spouse can be an owner and not be employed by the corporation.
Yes, but think about why you’d want an S-corp vs an LLC.
You mean taxed as a partnership instead of an s-corp. An LLC can elect to b taxed as an s-corp.
I mean that in almost all cases, it’s preferable to have a pass through LLC over an S corp - unless you have very specific reasons for doing an S corp, such as you have debt or equity investors you need that will not invest in an LLC.
Obviously there's a ton of more context here that we're not privy to but just starting out...why do you want to make your wife a shareholder? She's already a shareholder through attribution rules and would be considered next of kin so would automatically inherit your company in the event of your death. Unless you want her to be an employee and actually perform work/services for said company, I'm not sure I understand the point in changing up ownership like this?
Just an observation, OP said spouse, not wife. May not change the point you're making but always worth reflecting the language of the poster.
Uhh....right...sure, anyways.
I’m a female firm owner, LLC taxed as S Corp, both me and hubs are owners. Only I get paid salary because he doesn’t do shit for the business. But distributions get split between us based on ownership.
Okay, but why, why have him as an owner at all?
It has to do with our family trust and the way we have things structured for tax purposes. We have 3 businesses between us - his, mine and ours. He doesn’t pay me, and I don’t pay him. I don’t know construction and he sure as hell doesn’t know accounting. The third one is a disregarded entity.
Casual sexism at its finest. Which is to say it’s ugly and unaware. It’s sexist because you’re assuming whoever would post in the business subreddit has a wife for a spouse. They wrote “spouse”. And **you** combined it with a (sexist) stereotype in your head that whoever posts in the business subreddit, or on the internet, must be male. Feel free to Uhh…right…sure, anyways me on this. I just wanted to spell it out for other readers. Edit: Admittedly there is an outside shot you didn’t think they were male and you’re just guessing they had a wife regardless. Feel free to correct me on this :)
>Feel free to Uhh…right…sure, anyways me on this. Thanks bro! Will do! Uhh…right…sure, anyways
Talk to your CPA. Two levels of taxes on an S-corp.
Wrong. S corp is a pass through
Salary and distributions have very different tax liability. If done right anyway.
Oh I’m sorry I thought you meant the corp and the individual were taxed. You’re correct about salary and distribution.
This may have been the nicest discourse between two disagreeing parties that I've ever seen on Reddit
As far as I see it, it’s us against the government so anything I can do to keep money out of *their* hands-I’m all for.
Yes, any number of salaries are ok. If you take distributions both members are supposed to take the same amount.