What is the minimum annual tax on New York Limited Liability Corporation
August 9, 2006 6:04 PM Subscribe
Attn: New York Accountants!
What is the minimum annual tax that a one person LLC (Limited Liability Corporation) must pay in New York?
I own a small business in New York. I recently formed an LLC (one person). The purpose of the LLC is to be the signer on a lease for a property the business will be utilizing.
After forming the LLC, I mentioned to my accountant that I had done so. ( I didn’t speak with him in advance, I thought it was an obvious move so I simply proceeded.) He told me I should have checked with him first. He said I’d be better off closing the LLC and opening a subchapter S corp. because the LLC must pay a minimum tax of $700 per year, even when there's no taxable activity. He said that the minimum tax for a Subchapter S Corp. is $100.
Based on that, I called the company that I utilized to create the LLC, and requested that they initiate the subchapter S. The nice lady there said that she’s been working on these issues for many years, and had never heard about this $700 minimum tax. She acknowledged that my accountant may be correct, but suggested that I check further, just to be certain.
I checked with another accountant, and was told the following:
1) minimum annual tax for a one person LLC in New York is $100.
2) minimum for a two - five person LLC is $500, and goes up after that.
3) I'm better off with an LLC because with the LLC my personal assets are secure, with a subchapter S I can be personally liable.
I then called my accountant back, and relayed the above. Regarding the minimum tax, he said that New York State adds the additional charge, and it is $700. Regarding the business about the LLC better protecting my assets, he said that's ridiculous; the S Corp affords all the benefits of a corporation.
So where lies the truth? This is important to me beyond the annual charge, I need to feel confident in my financial advisor, and there have been moments in the past when I’ve wondered, and this time I’m determined to find out if he’s correct, at least on this issue.
Thanks in advance...
I own a small business in New York. I recently formed an LLC (one person). The purpose of the LLC is to be the signer on a lease for a property the business will be utilizing.
After forming the LLC, I mentioned to my accountant that I had done so. ( I didn’t speak with him in advance, I thought it was an obvious move so I simply proceeded.) He told me I should have checked with him first. He said I’d be better off closing the LLC and opening a subchapter S corp. because the LLC must pay a minimum tax of $700 per year, even when there's no taxable activity. He said that the minimum tax for a Subchapter S Corp. is $100.
Based on that, I called the company that I utilized to create the LLC, and requested that they initiate the subchapter S. The nice lady there said that she’s been working on these issues for many years, and had never heard about this $700 minimum tax. She acknowledged that my accountant may be correct, but suggested that I check further, just to be certain.
I checked with another accountant, and was told the following:
1) minimum annual tax for a one person LLC in New York is $100.
2) minimum for a two - five person LLC is $500, and goes up after that.
3) I'm better off with an LLC because with the LLC my personal assets are secure, with a subchapter S I can be personally liable.
I then called my accountant back, and relayed the above. Regarding the minimum tax, he said that New York State adds the additional charge, and it is $700. Regarding the business about the LLC better protecting my assets, he said that's ridiculous; the S Corp affords all the benefits of a corporation.
So where lies the truth? This is important to me beyond the annual charge, I need to feel confident in my financial advisor, and there have been moments in the past when I’ve wondered, and this time I’m determined to find out if he’s correct, at least on this issue.
Thanks in advance...
« Older My Beau Wants to Design Menswear | Help identify a very strange truck seen in Queens... Newer »
This thread is closed to new comments.
posted by xo at 10:36 PM on August 9, 2006