Question about LLC to be taxed as S-corp

Why would you want to do that? I would normally think that an LLC taxed as a pass-through would be either the same or better than the taxation of an S-corporation.

Would your accountant be the one to set up the new corporation, along with a significant charge for that service?

Did he state what the "issue" was? sounds bogus to me. The CA LLC return (form 568) has fields for BOTH the CA SOS number and the FEIN, so what would be the confusion?

Your accountant is balking at the notion that the ID numbers for federal and state purpose have **different numbers of characters**???

C'mon, John, read the signs: Sounds like your accountant might not have done his homework and studied the elections available to LLCs, especially the one whereby an LLC chooses to be taxed as if it were a corporation, and *also* - right there on the very same form (and, FYI, it's *not* Form 8832) - elects to be taxed as an S corporation. And he's worried that he won't be able to bill you for the time it's going to take him to get up to speed on the choices that LLCs can make about how they're taxed.

Okay, it's not really as simple as it sounds, overall, but the "dual" election is made on Form 2553, and it's due by March 15th of the current year. You might want to read up on the requirements to be eligible to be an S corporation to be sure your LLC toes the line in that respect.

And there are only nine digits in the federal ID number, not twelve, where I come from. Dunno 'bout California: everything is different back there.

An S Corp pays no $800 minimum tax in its first year of existence.

Thank you, Stuart! When I was last in California, Reagan was still in movies.

Does that LLC stealth tax have something to do with the number of digits in the state identification number?

If you are talking about the California $800 minimum tax, that applies to all corporations, LLC's and limited partnerships.

But for LLC's there's a special addition gross receipts tax when gross income exceeds $250,000.