"Harlan Lunsford" <hlunsford[at]bellsouth.net> wrote:
- quote -

from Calif booklet 568 (LLCs):
...

Annual Limited Liability Company Tax

If the 2004 annual tax of $800 was not paid on or
before the 15th day of the 4th month after the
beginning of the taxable year (fiscal year)or
April 15,2004 (calendar year),the tax should be
sent using the 2004 form FTB 3522,Limited

Liability Company Tax Voucher.(Do not use the
2005 form FTB 3522 included in this booklet.)
Also see General Information G,Penalties and
Interest,for the additional amount that is now
due. To assure proper application of the tax
payment to the LLC account,do not send the

Limited Liability Company Fee
In addition to the annual tax,every LLC must pay
a fee based on total annual income.The LLC fee
is due on or before the 15th day of the 4th month
after the close of the LLC 's taxable year.For
taxable years beginning on or after January 1,
2004,use the following chart to compute the fee:

If total annual income from The
Form 568,Side 1,line 1 is:fee is:
equal to or over –but not over –
$250,000 $499,999 $900
500,000 999,999 2,500
1,000,000 4,999,999 6,000
5,000,000 and over 11,790

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"DORFMONT[at]aol.com" <DORFMONT[at]aol.com> wrote:

- quote -

I'd like to see that, too. I'm aware of capitalization
that's treated like loans and is repaid without tax, but
that's all I can think of at the moment.

If he chooses to have the LLC taxed as a corporation, does
he get the same benefits?

Stu

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Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
- quote -

It's a California tax. The OP specified that his clients
are in Cal, so I assumed that's where he'd be transacting
business.

Stu

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Stuart A. Bronstein wrote:

- quote -

Could you perhaps expand on that? First I 've heard of it.
Assume you're speaking of federal income tax?

ChEAr$,
Harlan Lunsford

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Why would you want to form an S-Corp or an LLC? Those are
for losers. If you are bringing in over $200K and paying
yourself a salary of $120K you can form a C-Corporation and
take more money out for your benefit without paying taxes on
it. I am sending you my spreadsheet that explains how to get
money out of your corporation without paying taxes. You can
only do this with a C-Corp.

Linda Dorfmont E.A., CFP, CSA

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google_account[at]yahoo.com wrote:

- quote -

Yes, as long as the $120K is reasonable compensation for the
services you provide to the corporation.

- quote -

In CA, an S corporation is subject to an $800 annual fixed
dollar minimum tax or a measured tax of 1.5% of net income
(e.g., the $80,000 in your example), whichever is greater.
The CA tax is not deductible for CA purposes. The LLC is
also subject to the $800 minimum tax, PLUS a fee based on
"total income," which is generally gross receipts. For LLCs
with total income of $250,000 or less, the fee is zero; if
total income is $250K to $500K, the fee is $900. The fee is
a deductible expense for both CA and federal purposes, i.e.,
it reduces your taxable income flowing through from the LLC.
The $800 minimum tax is not deductible for CA.

- quote -

Not that I know of.

- quote -

I would think simplicity is the primary advantage of the
LLC. Of course no one really knows yet how good the
liability protection of the LLC structure is; it hasn't been
tested much. On the other hand, the protection of a
wholly-owned corporation in a personal service business may
be limited as well. These are questions you should discuss
with an attorney.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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google_account[at]yahoo.com wrote:

- quote -

Sounds reasonable. But if the LLC grosses over $250,000 for
the year, I understand there's an additional gross receipts
tax.

- quote -

An LLC can be taxed as either a partnership or a
corporation, so it gives you more flexibility from that
standpoint. But if you are going to have too high a gross
income, the S-corp will be better.

- quote -

What city are you in?

- quote -

Not that I am aware of.

Stu

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I am just a regular ol' software consultant who has had it
working for fat bureaucracies (and bosses) and am thinking
of going it alone. In the foreseeable future, I plan to be
working by myself for myself with a few clients that I have
in Northern California.

In trying to decide between a single-member S-corp and
single-member LLC, it seems like the major difference from a
taxation point of view is that I won't have to pay the 2.9%
Medicare tax on the "distributions" that I receive from the
S-corp whereas I will have to pay this tax if I were to
receive it from an LLC. In other words, if the S-corp nets
$200K for the year and I am salaried at $120K, I don't pay
the 2.9% on the remaining $80K.

1. Is this correct?
2. Am I missing anything else - from a taxation point of
view?
3. Is there a good online resource that you would recommend
for finding an accountant / CPA for advising on matters
such as starting up a small business?
4. Are there any non-tax reasons for using an LLC over an
S-corp in my situation (single person consulting in
California) other than easy to manage?

Thanks much in advance for your response!

Andrew

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