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Old 09-14-2018
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Default Paypal LLC as S-corp or C-corp?

when creating a LLC for use with paypal, is it better to file that LLC as a C-corp or S-Corp?

Anybody have experience with this?
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Old 09-14-2018
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Default Re: Paypal LLC as S-corp or C-corp?

What is you financial situation? Do you have foreign investors? Do you want to pay 20% corporate tax? Do you have multiple companies now that can eliminate the C-corp 20% corporate tax?
This question is for you and your tax advisory team. Nobody here knows you or your exact situation but C-corp is for big business 90% of the time. It has its own tax rate BEFORE it disperses income most of the time but every situation is unique. It is great for accumulating wealth if you have significant cashflow, foreign investors/owners etc...

S-corp is a lot more simple. ALL profit gets passed through to the shareholders. It does not have a federal tax of its own. You can set it up so that you pay nearly non or no SS and fica as a shareholder.
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Old 09-14-2018
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Default Re: Paypal LLC as S-corp or C-corp?

I'd go with S-Corp. But to be more precise, talk with your tax guy and he'll tell you the best option =)
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Old 09-14-2018
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Default Re: Paypal LLC as S-corp or C-corp?

I'd go with single member LLC since it's even easier than an S-corp. That way there would be no dividing profits among members. Any and all profits would be passed directly to your personal tax return.

I've always been curious about S-corps but I've never made one myself, because I've never seen a need.
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Old 09-14-2018
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Default Re: Paypal LLC as S-corp or C-corp?

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Originally Posted by phaz0rz View Post
I'd go with single member LLC since it's even easier than an S-corp. That way there would be no dividing profits among members. Any and all profits would be passed directly to your personal tax return.
I second this!
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Old 09-14-2018
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Default Re: Paypal LLC as S-corp or C-corp?

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Originally Posted by phaz0rz View Post
I'd go with single member LLC since it's even easier than an S-corp. That way there would be no dividing profits among members. Any and all profits would be passed directly to your personal tax return.

I've always been curious about S-corps but I've never made one myself, because I've never seen a need.
but you pay at least 15% self employment tax.....Worst type of entity as far as keeping your money. Single member LLC are for businesses that never make any money. Maybe a home business for write-offs as an example. They are identical to sole proprietors. Looser entities. Any CPA that suggests them should be terminated instantly IMO. They suck the profit right out of your business. Easiest means the government ****s you the most. Easy for a CPA means you have a lazy and/or ignorant CPA.

Last edited by yankee; 09-14-2018 at 02:25 PM.
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Default Re: Paypal LLC as S-corp or C-corp?

yea I have my main business as an S-Corp. you definitely get more tax breaks that way.. LLC i ended up paying more in self employment because i was not filed as S-corp

I also think filing as s-corp avoids the issue with paypal requesting a W9 form asking for SSN. as its multi member and they should only need EIN and business name.

single member LLC they request SSN , EIN, name on the W9 form for paypal.
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Old 09-15-2018
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Default Re: Paypal LLC as S-corp or C-corp?

Only if you mess up upgrading and get asked to fill out a w9. The 3 business PP's I have now are all single member LLC's and they've been going strong for 3 years.

Could you explain what you mean yankee (or tim)? How would I pay less taxes using an S-corp? I'm a young guy and don't have experience with other entity types.

My tax rate last year was closer to 30%. The 15% is a minimum self employment tax, right?
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Old 09-17-2018
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Default Re: Paypal LLC as S-corp or C-corp?

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Originally Posted by phaz0rz View Post
Only if you mess up upgrading and get asked to fill out a w9. The 3 business PP's I have now are all single member LLC's and they've been going strong for 3 years.

Could you explain what you mean yankee (or tim)? How would I pay less taxes using an S-corp? I'm a young guy and don't have experience with other entity types.

My tax rate last year was closer to 30%. The 15% is a minimum self employment tax, right?
No matter what on Single member LLC, you get 15% self employment tax on top of regular state and federal taxes. There is not a single entity that gets more taxed!! It is the WORST entity unless you are loosing money or breaking even.

S-corp, you pay yourself a small paycheck or nothing.....Then at the quarter or end of year you pay yourself via dividend and get taxed at CAPITAL GAINS ONLY. This oftentimes can be just 10-15% total tax. You oftentimes can also leave the money in the company balance and pay not tax at all(deferred anyways) with an S corp. Just as a basic idea. Also, what is so complicated about the 4 corporate meetings a year with yourself? Take yourself out to eat of the whole family to the Dominican to hold your meetings as a write off....It is just a few notes in a book...
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Old 09-17-2018
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Default Re: Paypal LLC as S-corp or C-corp?

I hear you, and I appreciate the explanation. I don't have experience with them and I've always been intimidated by things like "dividing profits between members" and "mandatory annual reporting" and of course, filing 2 separate tax returns.

Is there a separate tax filing for S-corps? Would the S-corp be taxed at 15% then profits reported on my personal taxes taxed at the capital gains rate? Your post is a bit unclear on that.
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Old 09-18-2018
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Default Re: Paypal LLC as S-corp or C-corp?

Quote:
Originally Posted by phaz0rz View Post
I hear you, and I appreciate the explanation. I don't have experience with them and I've always been intimidated by things like "dividing profits between members" and "mandatory annual reporting" and of course, filing 2 separate tax returns.

Is there a separate tax filing for S-corps? Would the S-corp be taxed at 15% then profits reported on my personal taxes taxed at the capital gains rate? Your post is a bit unclear on that.
S-corp does not get taxes at all. You will have a state filing fee. WY is $100 or so. Not sure on your state, MA is $500.00 Sending profits via dividend OR losses is required with an S corp. That is NOT regular income, does not get fica/SS taken out but a flat capital gains tax(what you want and how super rich get richer) Your corporate hours are just meetings with the shareholders that need to be recorded. They are also open to the public if getting sued to make sure you have proper protection and not allow corporate vail to be pierced. You literally talk with yourself and keep notes...or go on extravagant vacations like the rich do with shareholders(yourself)
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