Discussion:Best entity selection

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Discussion Forum Index --> Advanced Tax Questions --> Best entity selection
Discussion Forum Index --> Tax Questions --> Best entity selection

ELLIEMAE (talk\|edits) said:	27 December 2007
Brand new sole prop. dental practice. what is best all around entity from both a tax and liability standpoint? LLC, LLC with sub S election? Straight Sub S with reasonable salary? Wife only employee and has school district health ins. as part time school aide.

CrowJD (talk|edits) said:

27 December 2007

Since you are going to be running payroll anyway, I see no reason not go to with S. Corp. The LLC with S. election I don't personally like, but I understand it may be advantageous in some states. I'm for keeping things as simple as possible, but with the demand for dentists now being high, there could be a need to expand, and LLC/sole prop. is probably not the right choice. By the way, sounds like the wife is the one with the sweet position (part-timer with health ins.!?), where do I sign up as a school aide?

JR1 (talk\|edits) said:	December 27, 2007
Yep, s corp all the way. There may be something to be said for the sole prop/LLC route until income exceeds reasonable salary...my problem then is that you've got the stupid box check issue. I don't like to see folks enduring the costs of being a corp unless there are some SS tax savings to pay for it. That might take a few years for a beginning dentist.

KatieJ (talk\|edits) said:	27 December 2007
You may not be able to use an LLC for this professional practice. You can't do it in California, for example. You'd have to start with a real corporation, not an LLC electing corp status and S.

ELLIEMAE (talk\|edits) said:	27 December 2007
In response, can dentist reimburse wife for health ins costs thru S corp, include it in her w-2 and deduct as employee benefit? Does ins. have to be in corp's name?

Death&Taxes (talk\|edits) said:	27 December 2007
Ellie: read Discussion: Hot news on S corp Health Insurance (Notice 2008-1). All the answers you need to know are in there somewhere.

Dingodile (talk\|edits) said:	28 December 2007
Just to echo KatieJ...Make sure the desired entity is available for use by you client before you form anything. Also, it may be difficult to justify taking the SS tax savings a S-Corp. can generate if he never employs any fellow dentists.