Can you convert your LLC into an S Corp late in the year? #accounting #accountingtips

Thinking of converting your LLC into an S Corp late in the year? 🤔 Here's your guide on making that switch!

📅 Is a late conversion possible? Yes, with a late election on an S Corp using Form 2553 and some extra documents.
💼 Catch-up Payroll: If you haven't run payroll, a catch-up can be done. For instance, if you should've taken a $75,000 salary so far, you can now adjust accordingly.
💰 Payroll Details: When doing catch-up payroll, it's about paying the taxes, not the whole sum. Use distributions already taken to balance it out.
⚠️ Sole Proprietorship Limitation: Cannot convert directly to an S Corp from sole proprietorship. Start with an LLC, then make the conversion.
🏢 LLC Benefits: Provides legal protection and flexibility to convert to S Corp when ready. Don't miss out by sticking solely with a sole proprietorship.

Plan ahead, know your options, and stay informed! 🚀

#Smallbusinessowner #taxseason #entreprenuer #sidehustle #startup #budgeting #personalfinance #taxplanning #taxstrategy #taxtok #tax #taxes #taxdeductions