Guest guest Posted January 28, 2009 Report Share Posted January 28, 2009 a fellow LAC has given me an easy way to file for LLC. wondering about pros and cons of doing so (in addition to the obvious: legal protection). would like to hear thoughts about it. kath -- Kath Bartlett, LAc, MS, BA UCLA Oriental Medicine Experienced, Dedicated, Effective Kath's Blog about , Healthy Living & Spirituality: http://acukath.blogspot.com/ Flying Dragon Liniment: Effective pain relief for muscles & joints Formulated by Kath Bartlett, Traditional Chinese Herbalist Available at Asheville Center for : www.FlyingDragonLiniment.com and from the following supply companies: Kamwo Herbal Pharmacy: NY - Chinatown https://www.kamwo.com/shop/product.php?productid=17442 & cat=0 & page=1 Golden Needle Acupuncture, Herbal & Medical Supply - Candler, NC http://www.goldenneedleonline.com/index.php?page=categories & category=14 & vendor= & \ product=5554 & pg= Asheville Center For 70 Woodfin Place, Suite West Wing Two Asheville, NC 28801 828.258.2777 kbartlett www.AcupunctureAsheville.com Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 28, 2009 Report Share Posted January 28, 2009 I've recently formed an S-corporation for many of the same reasons. S-corps may have a slightly better tax advantage over LLC's but it is an argument for the tax attorneys mailing list.... and I'm certainly not qualified to go into any details. One thing that stands out is that you mention you did it for liability protection. An LLC (or S or C corp) does not protect you, as I understand it, from medical liability in any way shape or form. It protects you from a creditor coming after you for not being able to pay your bill for the 15 massage tables you ordered and cannot pay for, but that's about it. They'll get your whole business, but not your house, etc. which they would if you operate as a sole propietor. It also protects you from slip and fall and other standard business suits. Medical liability wise you are offered no protection from this status and a suit, technically, could still take everything you own. I've had a number of my fellow practitioners be told that they need to do this for liability purposes and it's just not the case from what I've read and what I've been told by more than a few tax attorneys, attorneys, and accountants. The pros as I see it are mostly tax advantages which depending on how much you make and a few other factors may not be worth the effort. Also the general liability protection from business debts, etc. may be helpful if you carry debt from owning your physical office, owning lots of expensive items and/or have a large herbal pharmacy. If you rent your office and have 1-2 treatment rooms and a phone, it may not be worth it. The cons are some increased paperwork and a definite need for an accountant, perhaps some expenses as well - but if you have a good accountant and received good guidance it should save more than it will cost you to do so.... -- Cheers, Chad J. Dupuis, L.Ac. Yin Yang House dupuis (423) 756-8010 Yin Yang House Acupuncture and Wellness Center 512 Tremont Street, Suite A Chattanooga, TN 37405 http://clinic.yinyanghouse.com/ CONFIDENTIALITY NOTICE: The information contained in this email, and any attachments, is confidential and may be privileged. If you are not the intended recipient, please destroy this message, delete any copies held in your systems, and notify the sender immediately. You should not retain, copy, or use this email for any purpose, nor disclose all of any of its content to any other person. We apologize for any inconvenience this may have caused. Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 28, 2009 Report Share Posted January 28, 2009 Just from personal experience, I later found out that legal protection is NOT a guarantee by using an LLC. You operate under an LLC but you are also still a person that could be sued - one person was going around saying the only true way to protect your personal assets when providing services to the public is to have all your personal assets belong to a 'family trust' of some sort. Second, I noticed what seems like 'double taxation'. You have to pay yourself as an employee so get taxed on personal income taxes but the LLC also gets taxed on the income it generates. Not to mention, once you become a corporation with employees you pay unemployment taxes, etc. Some things to check out in your state. It seemed for my small business that sole proprietorship was still the best way to go. It totally depends on your size of business, income, employees, etc. Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 29, 2009 Report Share Posted January 29, 2009 Under the advice of several friends and an accountant I met at a networking group I setup my company as an LLC S corp. I then went to a reputable accountant to get things setup. After reviewing all of my financials he told me that if it were him he would keep the business as a sole proprietorship. $350 down the drain. My malpractice insurance covers any injuries I may do to a patient. My business insurance covers any slips, falls, trips or any other significant issue that could occur operating as a public space. I don't have any insurance for theft etc. because I have nothing really worth stealing in my clinic. The LLC does not protect me if I break the law, injure a patient or anything else that matters to me. I run a small clinic, have no business debt and don't make enough for the tax advantages of the LLC S corp to compensate for the additional expenses of accountants, payroll services etc. The break even point is about $80,000 a year gross. The LLC offers some protection of your personal assets, but only from creditors which I don't have in my business. As Chad pointed out, there is no medical liability protection from an LLC. You injure someone and you don't have malpractice insurance they are coming after your house LLC or not. The bottom line is if something serious happens attorneys go where the money is. If you don't have a lot of money (we are talking hundreds of thousands if not millions of dollars) they will go after your insurance company. Your insurance company is equipped far better than you are at handling these situations anyway. Bottom line, unless you have employees, a larger practice grossing 6 figures, carry a lot of business debt, an LLC just isn't worth the trouble IMO. Christopher Vedeler L.Ac. Oasis Acupuncture <http://www.oasisacupuncture.com/> http://www.oasisacupuncture.com 9832 N. Hayden Rd. Suite 215 Scottsdale, AZ 85258 Phone: (480) 991-3650 Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 29, 2009 Report Share Posted January 29, 2009 were the Tax advantages? you need to do two tax returns and corporate tax returns can be expensive. 400 29th St. Suite 419 Oakland Ca 94609 alonmarcus Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 29, 2009 Report Share Posted January 29, 2009 The bottom line with forming a corporation is this: Let's say you are a corporation, and after expenses you have $120,000 left, now you can pay your self a reasonable wage, which in my opinion is about $60,000 a year (I worked in a hospital and that's what they paid me), now I am 4 days in my office, so I receive $50,000 in wages for my part-time work, that leaves $70,000 as a shareholder distribution. Those distributions are NOT subject to FICA, which is about 11% of your wages. Consequently you save almost $8,000 a year, or $80,000 in 10 years without working any extra, just by forming a corporation. Forming a corporation will cost you some start-up money, around $2,500 in attorney fees, one time. In short, if you earn a lot, go for it; it's worth while, otherwise it's a waste of money. Regards, Angela Pfaffenberger, Ph.D. angelapfa www.InnerhealthSalem.com Phone: 503 364 3022 - Christopher Vedeler L.Ac. Chinese Medicine Wednesday, January 28, 2009 4:24 PM RE: Re:LLC: pros and cons? Under the advice of several friends and an accountant I met at a networking group I setup my company as an LLC S corp. I then went to a reputable accountant to get things setup. After reviewing all of my financials he told me that if it were him he would keep the business as a sole proprietorship. $350 down the drain. My malpractice insurance covers any injuries I may do to a patient. My business insurance covers any slips, falls, trips or any other significant issue that could occur operating as a public space. I don't have any insurance for theft etc. because I have nothing really worth stealing in my clinic. The LLC does not protect me if I break the law, injure a patient or anything else that matters to me. I run a small clinic, have no business debt and don't make enough for the tax advantages of the LLC S corp to compensate for the additional expenses of accountants, payroll services etc. The break even point is about $80,000 a year gross. The LLC offers some protection of your personal assets, but only from creditors which I don't have in my business. As Chad pointed out, there is no medical liability protection from an LLC. You injure someone and you don't have malpractice insurance they are coming after your house LLC or not. The bottom line is if something serious happens attorneys go where the money is. If you don't have a lot of money (we are talking hundreds of thousands if not millions of dollars) they will go after your insurance company. Your insurance company is equipped far better than you are at handling these situations anyway. Bottom line, unless you have employees, a larger practice grossing 6 figures, carry a lot of business debt, an LLC just isn't worth the trouble IMO. Christopher Vedeler L.Ac. Oasis Acupuncture <http://www.oasisacupuncture.com/> http://www.oasisacupuncture.com 9832 N. Hayden Rd. Suite 215 Scottsdale, AZ 85258 Phone: (480) 991-3650 Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 30, 2009 Report Share Posted January 30, 2009 Chad has this right. The LLC or corporate form does not afford any meaningful protection against medical liability. The practitioner always retains personal liability for malpractice. The only way to avoid this liability is through professional liability insurance coverage. In California, medical professionals may not operate under an LLC. So the only options are sole proprietorship, partnership, or corporation. It's worth noting that S and C corps are *not* corporate forms, they are IRS elections for corporate tax purposes. Any C corporation can become an S corp or vice versa simply by changing their election with the IRS. Possible reasons for forming a corporation... * Your practice will incur significant debt and you'd like to shield personal assets from creditors; * You will be in a group practice with others. (The corporation can help shield you from malpractice perpetrated by another practitioner in the group.); * Your practice will be seeking outside investment; * Tax advantages. If your practice is bringing in significant revenue, there may be tax advantages to a corporation. (I've had a CPA here in California tell me that these advantages can't be realized unless the practice is grossing at least $400k annually.) --Bill. -- Bill Mosca, LAc San Francisco CA On Jan 28, 2009, at 3:06 PM, Chad J. Dupuis, L.Ac. wrote: > I've recently formed an S-corporation for many of the same reasons. > S-corps may have a slightly better tax advantage over LLC's but it > is an > argument for the tax attorneys mailing list.... and I'm certainly not > qualified to go into any details. > > One thing that stands out is that you mention you did it for liability > protection. An LLC (or S or C corp) does not protect you, as I > understand it, from medical liability in any way shape or form. It > protects you from a creditor coming after you for not being able to > pay > your bill for the 15 massage tables you ordered and cannot pay for, > but > that's about it. They'll get your whole business, but not your house, > etc. which they would if you operate as a sole propietor. It also > protects you from slip and fall and other standard business suits. > Medical liability wise you are offered no protection from this status > and a suit, technically, could still take everything you own. > > I've had a number of my fellow practitioners be told that they need to > do this for liability purposes and it's just not the case from what > I've > read and what I've been told by more than a few tax attorneys, > attorneys, and accountants. > > The pros as I see it are mostly tax advantages which depending on how > much you make and a few other factors may not be worth the effort. > Also > the general liability protection from business debts, etc. may be > helpful if you carry debt from owning your physical office, owning > lots > of expensive items and/or have a large herbal pharmacy. If you rent > your office and have 1-2 treatment rooms and a phone, it may not be > worth it. > > The cons are some increased paperwork and a definite need for an > accountant, perhaps some expenses as well - but if you have a good > accountant and received good guidance it should save more than it will > cost you to do so.... > > -- > > Cheers, > > Chad J. Dupuis, L.Ac. > Yin Yang House > dupuis > (423) 756-8010 > > Yin Yang House Acupuncture and Wellness Center > 512 Tremont Street, Suite A > Chattanooga, TN 37405 > http://clinic.yinyanghouse.com/ > > Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 30, 2009 Report Share Posted January 30, 2009 Yes, Bill is absolutely right. I grossed a little over $600,000 last year and it saved quite a sum of money. He's also right in that there is little or no savings if you make under a 100,000. I also specialize in integrated medicine and my equipment costs are pretty high. Therefore the S Corp serves as a shield. You can " opt out " at any time when you have an S corp, though I would not know why someone would want to do that. Also, with an S Corp. you can't have other Corporations under it. For that you need and LLC. I am trying to set up multiple clinics and I am having to make each one a separate corporation for some reason only my attorney knows. I, personally, like the S Corp. Don Snow, DAOM, MPH, LAc. : mosca: Fri, 30 Jan 2009 12:05:05 -0800Re: Re:LLC: pros and cons? Chad has this right. The LLC or corporate form does not afford any meaningful protection against medical liability. The practitioner always retains personal liability for malpractice. The only way to avoid this liability is through professional liability insurance coverage.In California, medical professionals may not operate under an LLC. So the only options are sole proprietorship, partnership, or corporation.It's worth noting that S and C corps are *not* corporate forms, they are IRS elections for corporate tax purposes. Any C corporation can become an S corp or vice versa simply by changing their election with the IRS.Possible reasons for forming a corporation...* Your practice will incur significant debt and you'd like to shield personal assets from creditors;* You will be in a group practice with others. (The corporation can help shield you from malpractice perpetrated by another practitioner in the group.);* Your practice will be seeking outside investment;* Tax advantages. If your practice is bringing in significant revenue, there may be tax advantages to a corporation. (I've had a CPA here in California tell me that these advantages can't be realized unless the practice is grossing at least $400k annually.)--Bill.--Bill Mosca, LAcSan Francisco CAOn Jan 28, 2009, at 3:06 PM, Chad J. Dupuis, L.Ac. wrote:> I've recently formed an S-corporation for many of the same reasons.> S-corps may have a slightly better tax advantage over LLC's but it > is an> argument for the tax attorneys mailing list.... and I'm certainly not> qualified to go into any details.>> One thing that stands out is that you mention you did it for liability> protection. An LLC (or S or C corp) does not protect you, as I> understand it, from medical liability in any way shape or form. It> protects you from a creditor coming after you for not being able to > pay> your bill for the 15 massage tables you ordered and cannot pay for, > but> that's about it. They'll get your whole business, but not your house,> etc. which they would if you operate as a sole propietor. It also> protects you from slip and fall and other standard business suits.> Medical liability wise you are offered no protection from this status> and a suit, technically, could still take everything you own.>> I've had a number of my fellow practitioners be told that they need to> do this for liability purposes and it's just not the case from what > I've> read and what I've been told by more than a few tax attorneys,> attorneys, and accountants.>> The pros as I see it are mostly tax advantages which depending on how> much you make and a few other factors may not be worth the effort. > Also> the general liability protection from business debts, etc. may be> helpful if you carry debt from owning your physical office, owning > lots> of expensive items and/or have a large herbal pharmacy. If you rent> your office and have 1-2 treatment rooms and a phone, it may not be> worth it.>> The cons are some increased paperwork and a definite need for an> accountant, perhaps some expenses as well - but if you have a good> accountant and received good guidance it should save more than it will> cost you to do so....>> -- >> Cheers,>> Chad J. Dupuis, L.Ac.> Yin Yang House> dupuis (423) 756-8010>> Yin Yang House Acupuncture and Wellness Center> 512 Tremont Street, Suite A> Chattanooga, TN 37405> http://clinic.yinyanghouse.com/>> Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 30, 2009 Report Share Posted January 30, 2009 Just wanted to pipe in on a semi related note. For those of you who do decide to incorporate or form online using some of the online incorporation services. They will ask you you want free tax advice/ consultation. If you indicate " yes " you will get a call from a company called the Tax Club out of New York. When you get a call they will try to sign you up for what seems like a great deal and lots of tax advice and support. What you will get instead of advice is a heavy-handed hard sell hard sell like you cannot believe all interaction with a live person will lead to another fee based product. They will also talk you into filing as an S corp, even if you thought you wanted an LLC electing to be taxes as an individual/ partnership, which in my mind is crazy. If you need the tax advantages of an S-Corp you should just incorporate and make that election with the IRS. Their reason for doing this is to sell you lots of " upgraded " services. My advice is to run, don't walk in the other direction, they are a complete scam in my opinion. David Toone, MSOM, L.Ac. On Jan 30, 2009, at 3:35 PM, Donald Snow wrote: > > Yes, Bill is absolutely right. I grossed a little over $600,000 > last year and it saved quite a sum of money. He's also right in > that there is little or no savings if you make under a 100,000. I > also specialize in integrated medicine and my equipment costs are > pretty high. Therefore the S Corp serves as a shield. You can " opt > out " at any time when you have an S corp, though I would not know > why someone would want to do that. > > Also, with an S Corp. you can't have other Corporations under it. > For that you need and LLC. I am trying to set up multiple clinics > and I am having to make each one a separate corporation for some > reason only my attorney knows. I, personally, like the S Corp. > > Don Snow, DAOM, MPH, LAc. > > : > mosca: Fri, 30 Jan 2009 12:05:05 -0800Re: > Re:LLC: pros and cons? > > Chad has this right. The LLC or corporate form does not afford any > meaningful protection against medical liability. The practitioner > always retains personal liability for malpractice. The only way to > avoid this liability is through professional liability insurance > coverage.In California, medical professionals may not operate under > an LLC. So the only options are sole proprietorship, partnership, > or corporation.It's worth noting that S and C corps are *not* > corporate forms, they are IRS elections for corporate tax purposes. > Any C corporation can become an S corp or vice versa simply by > changing their election with the IRS.Possible reasons for forming a > corporation...* Your practice will incur significant debt and you'd > like to shield personal assets from creditors;* You will be in a > group practice with others. (The corporation can help shield you > from malpractice perpetrated by another practitioner in the > group.);* Your practice will be seeking outside investment;* Tax > advantages. If your practice is bringing in significant revenue, > there may be tax advantages to a corporation. (I've had a CPA here > in California tell me that these advantages can't be realized > unless the practice is grossing at least $400k annually.)--Bill.-- > Bill Mosca, LAcSan Francisco CAOn Jan 28, 2009, at 3:06 PM, Chad J. > Dupuis, L.Ac. wrote:> I've recently formed an S-corporation for > many of the same reasons.> S-corps may have a slightly better tax > advantage over LLC's but it > is an> argument for the tax attorneys > mailing list.... and I'm certainly not> qualified to go into any > details.>> One thing that stands out is that you mention you did it > for liability> protection. An LLC (or S or C corp) does not protect > you, as I> understand it, from medical liability in any way shape > or form. It> protects you from a creditor coming after you for not > being able to > pay> your bill for the 15 massage tables you > ordered and cannot pay for, > but> that's about it. They'll get > your whole business, but not your house,> etc. which they would if > you operate as a sole propietor. It also> protects you from slip > and fall and other standard business suits.> Medical liability wise > you are offered no protection from this status> and a suit, > technically, could still take everything you own.>> I've had a > number of my fellow practitioners be told that they need to> do > this for liability purposes and it's just not the case from what > > I've> read and what I've been told by more than a few tax > attorneys,> attorneys, and accountants.>> The pros as I see it are > mostly tax advantages which depending on how> much you make and a > few other factors may not be worth the effort. > Also> the general > liability protection from business debts, etc. may be> helpful if > you carry debt from owning your physical office, owning > lots> of > expensive items and/or have a large herbal pharmacy. If you rent> > your office and have 1-2 treatment rooms and a phone, it may not > be> worth it.>> The cons are some increased paperwork and a > definite need for an> accountant, perhaps some expenses as well - > but if you have a good> accountant and received good guidance it > should save more than it will> cost you to do so....>> -- >> > Cheers,>> Chad J. Dupuis, L.Ac.> Yin Yang House> > dupuis (423) 756-8010>> Yin Yang House > Acupuncture and Wellness Center> 512 Tremont Street, Suite A> > Chattanooga, TN 37405> http://clinic.yinyanghouse.com/>> > > Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 30, 2009 Report Share Posted January 30, 2009 Don How did it save you the money? what happens when you want to take out the money? Do you maximize your retirement? Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 30, 2009 Report Share Posted January 30, 2009 You save money because you have some tax advantages by using the S Corp that you don't have with the LLC. These advantages were touched on in an earlier response. Second, at the end of the year I take a dividend check from my corp and zero it out. You do not pay the same taxes on stocks/dividends that you do on payroll. DJS : alonmarcus: Fri, 30 Jan 2009 13:35:27 -0800Re: LLC: pros and cons? DonHow did it save you the money? what happens when you want to take out the money? Do you maximize your retirement? Oakland CA 94609[Non-text portions of this message have been removed] Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 31, 2009 Report Share Posted January 31, 2009 Wow, did you gross over $600,000 from your work as an acupuncturist? I'd love to hear how you did that. Regards, Angela Pfaffenberger, Ph.D. angelapfa www.InnerhealthSalem.com Phone: 503 364 3022 - Donald Snow Chinese Traditional Medicine Friday, January 30, 2009 12:35 PM RE: Re:LLC: pros and cons? Yes, Bill is absolutely right. I grossed a little over $600,000 last year and it saved quite a sum of money. He's also right in that there is little or no savings if you make under a 100,000. I also specialize in integrated medicine and my equipment costs are pretty high. Therefore the S Corp serves as a shield. You can " opt out " at any time when you have an S corp, though I would not know why someone would want to do that. Also, with an S Corp. you can't have other Corporations under it. For that you need and LLC. I am trying to set up multiple clinics and I am having to make each one a separate corporation for some reason only my attorney knows. I, personally, like the S Corp. Don Snow, DAOM, MPH, LAc. : mosca: Fri, 30 Jan 2009 12:05:05 -0800Re: Re:LLC: pros and cons? Chad has this right. The LLC or corporate form does not afford any meaningful protection against medical liability. The practitioner always retains personal liability for malpractice. The only way to avoid this liability is through professional liability insurance coverage.In California, medical professionals may not operate under an LLC. So the only options are sole proprietorship, partnership, or corporation.It's worth noting that S and C corps are *not* corporate forms, they are IRS elections for corporate tax purposes. Any C corporation can become an S corp or vice versa simply by changing their election with the IRS.Possible reasons for forming a corporation...* Your practice will incur significant debt and you'd like to shield personal assets from creditors;* You will be in a group practice with others. (The corporation can help shield you from malpractice perpetrated by another practitioner in the group.);* Your practice will be seeking outside investment;* Tax advantages. If your practice is bringing in significant revenue, there may be tax advantages to a corporation. (I've had a CPA here in California tell me that these advantages can't be realized unless the practice is grossing at least $400k annually.)--Bill.--Bill Mosca, LAcSan Francisco CAOn Jan 28, 2009, at 3:06 PM, Chad J. Dupuis, L.Ac. wrote:> I've recently formed an S-corporation for many of the same reasons.> S-corps may have a slightly better tax advantage over LLC's but it > is an> argument for the tax attorneys mailing list.... and I'm certainly not> qualified to go into any details.>> One thing that stands out is that you mention you did it for liability> protection. An LLC (or S or C corp) does not protect you, as I> understand it, from medical liability in any way shape or form. It> protects you from a creditor coming after you for not being able to > pay> your bill for the 15 massage tables you ordered and cannot pay for, > but> that's about it. They'll get your whole business, but not your house,> etc. which they would if you operate as a sole propietor. It also> protects you from slip and fall and other standard business suits.> Medical liability wise you are offered no protection from this status> and a suit, technically, could still take everything you own.>> I've had a number of my fellow practitioners be told that they need to> do this for liability purposes and it's just not the case from what > I've> read and what I've been told by more than a few tax attorneys,> attorneys, and accountants.>> The pros as I see it are mostly tax advantages which depending on how> much you make and a few other factors may not be worth the effort. > Also> the general liability protection from business debts, etc. may be> helpful if you carry debt from owning your physical office, owning > lots> of expensive items and/or have a large herbal pharmacy. If you rent> your office and have 1-2 treatment rooms and a phone, it may not be> worth it.>> The cons are some increased paperwork and a definite need for an> accountant, perhaps some expenses as well - but if you have a good> accountant and received good guidance it should save more than it will> cost you to do so....>> -- >> Cheers,>> Chad J. Dupuis, L.Ac.> Yin Yang House> dupuis (423) 756-8010>> Yin Yang House Acupuncture and Wellness Center> 512 Tremont Street, Suite A> Chattanooga, TN 37405> http://clinic.yinyanghouse.com/>> Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 31, 2009 Report Share Posted January 31, 2009 We spent only $500 to incorporate with the help of our accountant. We do max-out our SIMPLE contributions (no taxes until withdrawn). Mark Z Chinese Medicine , " Angela Pfaffenberger, PH.D. " <angelapfa wrote: > > The bottom line with forming a corporation is this: Let's say you are a corporation, and after expenses you have $120,000 left, now you can pay your self a reasonable wage, which in my opinion is about $60,000 a year (I worked in a hospital and that's what they paid me), now I am 4 days in my office, so I receive $50,000 in wages for my part-time work, that leaves $70,000 as a shareholder distribution. Those distributions are NOT subject to FICA, which is about 11% of your wages. Consequently you save almost $8,000 a year, or $80,000 in 10 years without working any extra, just by forming a corporation. Forming a corporation will cost you some start-up money, around $2,500 in attorney fees, one time. In short, if you earn a lot, go for it; it's worth while, otherwise it's a waste of money. > > Regards, > Angela Pfaffenberger, Ph.D. > > angelapfa > > www.InnerhealthSalem.com > > Phone: 503 364 3022 > - > Christopher Vedeler L.Ac. > Chinese Medicine > Wednesday, January 28, 2009 4:24 PM > RE: Re:LLC: pros and cons? > > > Under the advice of several friends and an accountant I met at a > networking group I setup my company as an LLC S corp. I then went to a > reputable accountant to get things setup. After reviewing all of my > financials he told me that if it were him he would keep the business as > a sole proprietorship. $350 down the drain. > > My malpractice insurance covers any injuries I may do to a patient. My > business insurance covers any slips, falls, trips or any other > significant issue that could occur operating as a public space. I don't > have any insurance for theft etc. because I have nothing really worth > stealing in my clinic. The LLC does not protect me if I break the law, > injure a patient or anything else that matters to me. I run a small > clinic, have no business debt and don't make enough for the tax > advantages of the LLC S corp to compensate for the additional expenses > of accountants, payroll services etc. The break even point is about > $80,000 a year gross. > > The LLC offers some protection of your personal assets, but only from > creditors which I don't have in my business. As Chad pointed out, there > is no medical liability protection from an LLC. You injure someone and > you don't have malpractice insurance they are coming after your house > LLC or not. > > The bottom line is if something serious happens attorneys go where the > money is. If you don't have a lot of money (we are talking hundreds of > thousands if not millions of dollars) they will go after your insurance > company. Your insurance company is equipped far better than you are at > handling these situations anyway. > > Bottom line, unless you have employees, a larger practice grossing 6 > figures, carry a lot of business debt, an LLC just isn't worth the > trouble IMO. > > Christopher Vedeler L.Ac. > Oasis Acupuncture > <http://www.oasisacupuncture.com/> http://www.oasisacupuncture.com > 9832 N. Hayden Rd. > Suite 215 > Scottsdale, AZ 85258 > Phone: (480) 991-3650 > > Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 31, 2009 Report Share Posted January 31, 2009 I also had come across the Tax Club, through a different venue, and I came away with the same impression. Definitely heavy fear-based hard-selling tactics with some guilt thrown in to complete the picture. I agree - run, don't walk - in the opposite direction! Andrea Beth Traditional Oriental Medicine Happy Hours in the CALM Center 1770 E. Villa Drive, Suite 5 Cottonwood, AZ 86326 (928) 274-1373 --- On Fri, 1/30/09, David Toone <davidetoone wrote: David Toone <davidetoone Re: Re:LLC: pros and cons? Chinese Medicine Friday, January 30, 2009, 2:07 PM Just wanted to pipe in on a semi related note. For those of you who do decide to incorporate or form online using some of the online incorporation services. They will ask you you want free tax advice/ consultation. If you indicate " yes " you will get a call from a company called the Tax Club out of New York. When you get a call they will try to sign you up for what seems like a great deal and lots of tax advice and support. What you will get instead of advice is a heavy-handed hard sell hard sell like you cannot believe all interaction with a live person will lead to another fee based product. They will also talk you into filing as an S corp, even if you thought you wanted an LLC electing to be taxes as an individual/ partnership, which in my mind is crazy. If you need the tax advantages of an S-Corp you should just incorporate and make that election with the IRS. Their reason for doing this is to sell you lots of " upgraded " services. My advice is to run, don't walk in the other direction, they are a complete scam in my opinion. David Toone, MSOM, L.Ac. On Jan 30, 2009, at 3:35 PM, Donald Snow wrote: > > Yes, Bill is absolutely right. I grossed a little over $600,000 > last year and it saved quite a sum of money. He's also right in > that there is little or no savings if you make under a 100,000. I > also specialize in integrated medicine and my equipment costs are > pretty high. Therefore the S Corp serves as a shield. You can " opt > out " at any time when you have an S corp, though I would not know > why someone would want to do that. > > Also, with an S Corp. you can't have other Corporations under it. > For that you need and LLC. I am trying to set up multiple clinics > and I am having to make each one a separate corporation for some > reason only my attorney knows. I, personally, like the S Corp. > > Don Snow, DAOM, MPH, LAc. > > : > mosca: Fri, 30 Jan 2009 12:05:05 -0800Re: > Re:LLC: pros and cons? > > Chad has this right. The LLC or corporate form does not afford any > meaningful protection against medical liability. The practitioner > always retains personal liability for malpractice. The only way to > avoid this liability is through professional liability insurance > coverage.In California, medical professionals may not operate under > an LLC. So the only options are sole proprietorship, partnership, > or corporation.It's worth noting that S and C corps are *not* > corporate forms, they are IRS elections for corporate tax purposes. > Any C corporation can become an S corp or vice versa simply by > changing their election with the IRS.Possible reasons for forming a > corporation...* Your practice will incur significant debt and you'd > like to shield personal assets from creditors;* You will be in a > group practice with others. (The corporation can help shield you > from malpractice perpetrated by another practitioner in the > group.);* Your practice will be seeking outside investment;* Tax > advantages. If your practice is bringing in significant revenue, > there may be tax advantages to a corporation. (I've had a CPA here > in California tell me that these advantages can't be realized > unless the practice is grossing at least $400k annually.)--Bill.-- > Bill Mosca, LAcSan Francisco CAOn Jan 28, 2009, at 3:06 PM, Chad J. > Dupuis, L.Ac. wrote:> I've recently formed an S-corporation for > many of the same reasons.> S-corps may have a slightly better tax > advantage over LLC's but it > is an> argument for the tax attorneys > mailing list.... and I'm certainly not> qualified to go into any > details.>> One thing that stands out is that you mention you did it > for liability> protection. An LLC (or S or C corp) does not protect > you, as I> understand it, from medical liability in any way shape > or form. It> protects you from a creditor coming after you for not > being able to > pay> your bill for the 15 massage tables you > ordered and cannot pay for, > but> that's about it. They'll get > your whole business, but not your house,> etc. which they would if > you operate as a sole propietor. It also> protects you from slip > and fall and other standard business suits.> Medical liability wise > you are offered no protection from this status> and a suit, > technically, could still take everything you own.>> I've had a > number of my fellow practitioners be told that they need to> do > this for liability purposes and it's just not the case from what > > I've> read and what I've been told by more than a few tax > attorneys,> attorneys, and accountants.>> The pros as I see it are > mostly tax advantages which depending on how> much you make and a > few other factors may not be worth the effort. > Also> the general > liability protection from business debts, etc. may be> helpful if > you carry debt from owning your physical office, owning > lots> of > expensive items and/or have a large herbal pharmacy. If you rent> > your office and have 1-2 treatment rooms and a phone, it may not > be> worth it.>> The cons are some increased paperwork and a > definite need for an> accountant, perhaps some expenses as well - > but if you have a good> accountant and received good guidance it > should save more than it will> cost you to do so....>> -- >> > Cheers,>> Chad J. Dupuis, L.Ac.> Yin Yang House> > dupuis (423) 756-8010>> Yin Yang House > Acupuncture and Wellness Center> 512 Tremont Street, Suite A> > Chattanooga, TN 37405> http://clinic.yinyanghouse.com/>> > > Quote Link to comment Share on other sites More sharing options...
Guest guest Posted January 31, 2009 Report Share Posted January 31, 2009 I am trying to understand in a little more depth. I used to be an S- corp but could not see any real savings except a second tax return. Perhaps i was getting bad advise from my accountant that is why i would like to hear a little more detail. 400 29th St. Suite 419 Oakland Ca 94609 alonmarcus Quote Link to comment Share on other sites More sharing options...
Guest guest Posted February 2, 2009 Report Share Posted February 2, 2009 Hi Dr. Angela, You'd be one of the few that are at all curious as to how I earn this kind of income and 70% of that is income. When I taught at PCOM SD I tried in vain to teach students my methodology and how to bill (and get paid) but there was little interest. They were impressed with the results (90%+) but did not want to do the work. It is time intensive, but for insurance, guess what? They pay for time in increments of 15 minutes. I am no longer interested in teaching anyone my methodologies and I have paid a nice some of money to patent it and I now have a patent-pending. What I am interested in doing is hiring interested acupuncturists and paying them a nice fixed salary while they learn my methodology. Then I want to set them up in their own clinics; pay for their equipment, assistants, and advertising. Then when they are self-sufficient letting them buy back a share/percentage of the business and they just pay me a percentage thereafter. The reason being is that if I teach you how to make a million dollars, assuming you don't already know how, I should get a percentage of that for time indefinite plus the doctor will not legally be able to share my knowledge with others. You can contact me offline if interested. But I am living proof that we can make a nice living, much more than the $60 - $80,000 that most of my colleagues think is a living wage. As for the tax advantages of having an S-Corp. They are not really realized until you are big enough to hire others and can take annual dividend checks. Corporations also help when you make enough to begin a retirement fund and they also protect you from the mistakes of your employees. If you are not making at least a couple of hundred thousand a year, sole propriator is good enough. When you want to know how to make money, talk to those who are actually doing it. Otherwise, everyone has an opinion..... Sincerely, Dr. Don S. DAOM, MPH, LAc. : angelapfa: Fri, 30 Jan 2009 17:30:53 -0800Re: Re:LLC: pros and cons? Wow, did you gross over $600,000 from your work as an acupuncturist? I'd love to hear how you did that.Regards,Angela Pfaffenberger, Ph.D.angelapfa: 503 364 3022----- Original Message ----- Donald Snow To: Chinese Traditional Medicine Friday, January 30, 2009 12:35 PMRE: Re:LLC: pros and cons?Yes, Bill is absolutely right. I grossed a little over $600,000 last year and it saved quite a sum of money. He's also right in that there is little or no savings if you make under a 100,000. I also specialize in integrated medicine and my equipment costs are pretty high. Therefore the S Corp serves as a shield. You can " opt out " at any time when you have an S corp, though I would not know why someone would want to do that. Also, with an S Corp. you can't have other Corporations under it. For that you need and LLC. I am trying to set up multiple clinics and I am having to make each one a separate corporation for some reason only my attorney knows. I, personally, like the S Corp. Don Snow, DAOM, MPH, LAc.To: Chinese Medicine: mosca: Fri, 30 Jan 2009 12:05:05 -0800Re: Re:LLC: pros and cons?Chad has this right. The LLC or corporate form does not afford any meaningful protection against medical liability. The practitioner always retains personal liability for malpractice. The only way to avoid this liability is through professional liability insurance coverage.In California, medical professionals may not operate under an LLC. So the only options are sole proprietorship, partnership, or corporation.It's worth noting that S and C corps are *not* corporate forms, they are IRS elections for corporate tax purposes. Any C corporation can become an S corp or vice versa simply by changing their election with the IRS.Possible reasons for forming a corporation...* Your practice will incur significant debt and you'd like to shield personal assets from creditors;* You will be in a group practice with others. (The corporation can help shield you from malpractice perpetrated by another practitioner in the group.);* Your practice will be seeking outside investment;* Tax advantages. If your practice is bringing in significant revenue, there may be tax advantages to a corporation. (I've had a CPA here in California tell me that these advantages can't be realized unless the practice is grossing at least $400k annually.)--Bill.--Bill Mosca, LAcSan Francisco CAOn Jan 28, 2009, at 3:06 PM, Chad J. Dupuis, L.Ac. wrote:> I've recently formed an S-corporation for many of the same reasons.> S-corps may have a slightly better tax advantage over LLC's but it > is an> argument for the tax attorneys mailing list.... and I'm certainly not> qualified to go into any details.>> One thing that stands out is that you mention you did it for liability> protection. An LLC (or S or C corp) does not protect you, as I> understand it, from medical liability in any way shape or form. It> protects you from a creditor coming after you for not being able to > pay> your bill for the 15 massage tables you ordered and cannot pay for, > but> that's about it. They'll get your whole business, but not your house,> etc. which they would if you operate as a sole propietor. It also> protects you from slip and fall and other standard business suits.> Medical liability wise you are offered no protection from this status> and a suit, technically, could still take everything you own.>> I've had a number of my fellow practitioners be told that they need to> do this for liability purposes and it's just not the case from what > I've> read and what I've been told by more than a few tax attorneys,> attorneys, and accountants.>> The pros as I see it are mostly tax advantages which depending on how> much you make and a few other factors may not be worth the effort. > Also> the general liability protection from business debts, etc. may be> helpful if you carry debt from owning your physical office, owning > lots> of expensive items and/or have a large herbal pharmacy. If you rent> your office and have 1-2 treatment rooms and a phone, it may not be> worth it.>> The cons are some increased paperwork and a definite need for an> accountant, perhaps some expenses as well - but if you have a good> accountant and received good guidance it should save more than it will> cost you to do so....>> -- >> Cheers,>> Chad J. Dupuis, L.Ac.> Yin Yang House> dupuis (423) 756-8010>> Yin Yang House Acupuncture and Wellness Center> 512 Tremont Street, Suite A> Chattanooga, TN 37405> http://clinic.yinyanghouse.com/>> [Non-text portions of this message have been removed][Non-text portions of this message have been removed] Quote Link to comment Share on other sites More sharing options...
Guest guest Posted February 3, 2009 Report Share Posted February 3, 2009 Hey Don, First, I'm so happy for your success!! Way to go! I sure hope that you are able to be a beacon for those struggling in this profession and be one example of success through compassionate care. I know your dedication is sincere. With regards to your feeling that what you have to teach wasn't well received at PCOM SD - I think that the student level is just not the right time for that information to be received. Students are generally overwhelmed with the academic requirements and in various stages of burn-out and overwhelm, and in some cases, financial burden. Not a lot of brain-space is left over to think about the business aspect of things. So, I hope you don't get too discouraged by that...I think it is just a timing/audience issue and not that what you have to teach isn't wanted. In fact, I think the contrary is more the case as a lot of practitioners seem to be struggling. Personally, I'm doing pretty good (although not as well as you:-) - but I came into private practice/clinic ownership with previous corporate/business experience which I think serves me well. Sorry to hear you're no longer interested in teaching your methodologies, but I wish you success in your attempts to franchise your knowledge:-) Joy ________ Joy Keller, LAc, Dipl.OM Board Certified in Acupuncture & Oriental Medicine Ramona Acupuncture & Integrative Medicine Clinic Phone: (760) 654-1040 Fax: (760) 654-4019 www.RamonaAcupuncture.com Quote Link to comment Share on other sites More sharing options...
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