Tax Considerations – S-Corporations for Dental Entities

When you are ready to form an entity for your practice you have two primary initial decisions, which type of entity and, what type of tax election will you make.  A professional limited liability company could be taxed in the following manners – as pass-through, a partnership, an s-corporation, or as a corporation.

What Is an S-Corp

An S-Corp is a type of tax election.  The benefit of the S-Corp election or “S-Election” is creating flexibility to pay yourself a reasonable salary and, in return, avoid a portion of your FICA tax for Social Security and Medicare.  If you are currently practicing and not utilizing S-Corp taxation or starting a practice, you should consider this approach and you qualify so long as:

  • You have less than 100 owners
  • Only individual, US residents own interests
  • One class of owners exists —no preferred members
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