entity conversion

As your business grows, sometimes the character of the income you earn changes. This is especially true if you are looking to make the move from actively working in your business to having it passively run by itself, without your daily involvement. But if you don’t keep an eye on your business tax status you could find yourself paying far more in taxes than you need to!

If you’ve talked to Diane or I in the past year about choice of entity, we’ve probably told you about our favorite combination, the LLC taxed as an S Corporation. But what about those of you who already have a business? Do you change it, or do you start over? And what are the tax consequences of making a switch? A new letter ruling just released by the IRS offers good news!