inspiredpurpose
New member
I have 2 small businesses that amount to part time work hour-wise for me. Keeping it simple as possible:
Business #1: 33k revenue, 25k profit last year. This is completely online passive income besides occasional customer service emails and I’m very happy with that number. Business is 5 years old and a sole proprietorship.
Business #2: $22k revenue, 15k profit. This is not passive, this is a handmade physical product based business. I would expect profits to be 20k+ but not exceeding 25k this year. I formed an LLC for this business at the beginning of 2024 mostly bc the items (not for children) could be a choking hazard to them, people are insane, and it’s under $50 in my state.
The 2 businesses are about as similar as an an onlyfans and a quilt shop. They have nothing to do with each other. My accountant is pushing for me to combine these two business to one LLC and form an S Corp. At projected $40-45k combined profit, that is not worth it, correct?
Additionally, I’ll be delivering our first child in November and that along with the fact my husband is projected to get a substantial raise this summer will likely affect the physical product based business as I see myself taking a step back from it. So I expect to make less from that side in the future, not more.
I didn’t get here by accident or ignorance and I guess this is besides the point, but my accountants “you should do ____” vs “this is how it breaks down, look at these two options and tell me which you’d like to do” has given me major she-won’t-even-understand-if-I-try-to-tell-her vibes. He didn’t at all mention distributions vs salary, need to establish payroll (I already know these things, but he doesn’t know that) he just glossed over everything making it seem like the only thing is I wouldn’t be paying the few thousand in self employment taxes if I did it.
I’m not an expert, but having previously researched S-Corps and LLCs, I have never came to the conclusion combining them and forming an S-Corp would be beneficial to me at this point or in the near future.
Business #1: 33k revenue, 25k profit last year. This is completely online passive income besides occasional customer service emails and I’m very happy with that number. Business is 5 years old and a sole proprietorship.
Business #2: $22k revenue, 15k profit. This is not passive, this is a handmade physical product based business. I would expect profits to be 20k+ but not exceeding 25k this year. I formed an LLC for this business at the beginning of 2024 mostly bc the items (not for children) could be a choking hazard to them, people are insane, and it’s under $50 in my state.
The 2 businesses are about as similar as an an onlyfans and a quilt shop. They have nothing to do with each other. My accountant is pushing for me to combine these two business to one LLC and form an S Corp. At projected $40-45k combined profit, that is not worth it, correct?
Additionally, I’ll be delivering our first child in November and that along with the fact my husband is projected to get a substantial raise this summer will likely affect the physical product based business as I see myself taking a step back from it. So I expect to make less from that side in the future, not more.
I didn’t get here by accident or ignorance and I guess this is besides the point, but my accountants “you should do ____” vs “this is how it breaks down, look at these two options and tell me which you’d like to do” has given me major she-won’t-even-understand-if-I-try-to-tell-her vibes. He didn’t at all mention distributions vs salary, need to establish payroll (I already know these things, but he doesn’t know that) he just glossed over everything making it seem like the only thing is I wouldn’t be paying the few thousand in self employment taxes if I did it.
I’m not an expert, but having previously researched S-Corps and LLCs, I have never came to the conclusion combining them and forming an S-Corp would be beneficial to me at this point or in the near future.