Part 2/6:
Before diving into the conversion process, it's important to understand that an S corporation isn't a separate legal entity. Rather, it is a tax election that LLCs or corporations can make with the IRS to enjoy certain tax benefits and protections. These benefits include personal liability protection and related tax savings.
Why Consider Converting?
The primary motivation for converting your LLC into an S corp involves the potential for significant tax advantages and liability protection. While LLCs offer flexibility and liability protection, S corps can provide tax savings—especially in terms of self-employment taxes—making the transition financially beneficial for some business owners.