🎙️ S Corporation Reality Check
Episode 3 of Tax in Action Is Now Live!
🎙️ In the latest Tax in Action episode, I dive into the critical red flags that should make every tax professional pause before recommending an S corporation election. We're seeing a dangerous trend where the "cottage industry" built around S corporations is leading to poor advice and unexpected consequences for business owners.
In this episode, you’ll learn the following:
📊 How debt-heavy balance sheets can trigger taxable events during an election;
😱 Ensuring LLC operating agreement provisions don’t violate S corporation rules and lead to unintended terminations;
💼 Equity structures that don't work with single-class stock requirements; and
💸 State taxes that can completely wipe out tax savings.
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Partnerships and sole proprietorships often serve business owners better than the hyped S corporation structure. Before you recommend that next S-election, make sure you're considering the full picture, not just the self-employment tax savings.