Can I convert from LLC to S-Corp to avoid paying self-employment taxes?
April 1, 2014 10:14 AM Subscribe
Is it possible to convert my LLC to an S-Corp to avoid paying $10,000+ in 2013 self-employment taxes?
posted by anonymous to Work & Money (10 answers total) 2 users marked this as a favorite
I've been a freelance web developer for only 2 years. I was advised to set things up as an LLC. The first year I barely made any money, the second year I made about $80,000. Which brought self-employment taxes to $10,000 and total federal taxes to $20,000. I don't have the money for this and don't want to pay it every year.
I've heard that an S-Corp is more troublesome, but cheaper. I've also called local tax professionals and they have all been too busy to handle this, or think that it's too late for this tax period. Is it? What if I filed an extension and converted my LLC in the meantime? What other steps do I need? I am very green at this so simplified explanations are ideal. Sorry & thanks!