I have a homework assignment where I need to talk about what entity type a small business owner should use to structure their business in a manner that provides asset/liability protection and tax planning savings.
The two individuals (my “fake clients”) have a small dentist practice. The wife is the dentist and the husband runs the business side. Their salaries are not given. They do, however, have two employees that earn $36,000 and $75,000 a year, respectively.
The clients intend to save $2,500 a month for savings. The couples income from the dentist practice, after paying their employee’s salaries, is $193,000.
My thoughts were to put the husband and wife into a S-Corp and the employees in a LLC so the husband and wife can take a SEP and not have to worry about paying an equal contribution to their two employees. They can do a simple IRA for them and contribute to them in the LLC.
I ran some calculations and provided an assumed salary for the husband and wife, and I calculated that the S-Corp provides better tax savings than the LLC.
Does this make any sense or am I totally going down the wrong path?
What else should I be considering?
Submitted March 06, 2019 at 03:33PM by Thyestes https://ift.tt/2NJwg90
