As your business grows, your tax advisor will likely recommend that you transition from an LLC to an S Corp to gain a few tax advantages once you’re at about a $50,000 profit mark for the year.
When you do, you will become an official W2 employee of your company.
Plus, as you’re growing at that level, you’ll likely start considering bringing on one or more full-time employees..
In this episode, Sydney and Kristen discuss this transition and what it looks like, plus some considerations you need to keep in mind from an accounting and bookkeeping perspective that might change based on what’s required of you.
01:29 — Making the switch to become an employee of your business and to hire W2 employees
03:18 — When should you make your LLC an S Corp?
04:54 — The requirements you must meet to maintain an S Corp
07:09 — How to properly onboard yourself as an employee
11:29 — Identifying a "reasonable" salary to pay yourself
13:33 — How becoming an S Corp can affect the way your bookkeeping and accounting needs to be managed
RESOURCES MENTIONED:
📚 RESOURCES MENTIONED:
Gusto Payroll Software: https://gusto.com/r/sydney0959
ADP Payroll Software: https://www.adp.com/what-we-offer/products.aspx
📞 BOOK A CALL TO WORK TOGETHER
Changing your business structure, hiring contractors or employees, or any other big changes can require different bookkeeping and accounting needs.
Our team at Know Your Worth will make sure that you have everything you need from the bookkeeping side to best ensure you don’t raise any red flags to the IRS, plus make it easier for your CPA to file your taxes and get you the best return!
Schedule a call with us today to see how we can support your bookkeeping needs: https://knowyourworthpgh.com/contact
📈 UNDERSTANDING YOUR PROFIT AND LOSS GUIDE
Get the Profit and Loss Guide
✅ BOOKKEEPING CHECKLIST
Get the Book Keeping Checklist
👋 CONNECT WITH SYDNEY & KRISTEN
Website: https://knowyourworthpgh.com/
Instagram: https://www.instagram.com/knowyourworth_pgh/
YouTube: https://www.youtube.com/channel/UC3wzOVSDSC-xsmLg8JJ8MJg/
