MultiMember LLC, taxed as Partnership question

[Adam Byrne]

Hi BP!

I am a partner in a multi-member LLC, taxed as a partnership. Since I'm actively managing, I pay myself a management fee and 1099 myself at the end of the year.

I like to show the income to season my tax returns for refinancing purposes but would like to optimize my tax expenses.

Would it be advantageous to change our filing status to S Corp (or other) or should we keep the Partnership designation? 

Thanks, Adam

[Matthew Creel]

@Adam Byrne How is this payment being recorded on the LLC's books when paid? I assume it's being recorded to management expense. If for some reason it is being shown as a distribution to owner you could be subjecting yourself to double taxation by issuing yourself a 1099 given with an LLC you are paying tax on your portion of the total net income every year. As for the S corp election there could be tax benefits to electing S in the way of employment tax deductions for the company if salary/payroll is paid and a reduction in self employment taxes for the passthrough owners. You would definitely need to consult your CPA to discuss all the particulars before making that election. Also, if that is route you decide to go you would need to make that election before 3/15 of the current year to have it apply to all of 2019.