Two conflicting CPAs

[Josh C.]

I have a CPA who I think is good. My business partner also has a CPA who he thinks is good, but they are giving conflicting advice. My partner and own a couple different LLCs together and would like the tax advantages of an S-Corp. I know there is a process to do that, but my question is if the owner of the LLC is an S-Corp would you get those tax advantages (no self employment tax). My accountant says we can just leave the llc we own together A LLC and change ownership from Josh and Keith to B s-Corp and C s-Corp and avoid self employment tax, but his says he isn't sure but that it doesn't sound right which gives me little confidence. I am a little reluctant to change the tax election of A LLC due to my attorney's advice and it just being a pain. I'd really prefer to just change ownership. What do you guys think? And thanks in advance. A great business idea is a legal and CPA shop in one. Why is this not a thing? I guess the same reason a property management software and accounting software aren't merged. So frustrating. Ha

[Brandon Hall]

@Josh C. electing S-Corp tax status is very easy. It takes one form which can take all of 15 minutes to fill out. The hard part is setting up all that needs to be set up with an S-Corp (accountable plan, salary analytics, payroll, Corp minutes, etc).

Likely, the best way to go about doing this is for you and your partner to each set up personal S-Corps that then take over your ownership stakes in your LLC. This way your LLC is the partnership but you still maintain the S-Corp tax benefits. Best of both worlds.

Knowing the law is tough. Knowing the tax code is tough. Knowing both is likely a waster of time. You'd be doing more research than client delivery. There are lawyer/CPAs out there but it seems like it would be over kill and a lot of energy would be spent on keeping current with changes and techniques.