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baldona
Auburn Fan
Florida
Member since Feb 2016
10438 posts

Accounting charge for moving from Llc to S corp
How much time does this take? Got a bill for $2100. Spent probably 1-2 hours discussing it before hand and maybe 1 hour during the process. At most 3 hours, but more likely under 2 even rounding way up. 45 minute in person meeting then a couple phone calls and emails to clarify everything. I’m guessing it’s mostly a set amount by the firm. One of the south’s too 5 largest CPA firms, Im sure that’s part of my issue. I’m probably going to find a new CPA because of this. Really like my CPA but my yearly cost is under $1500, this over doubled it.

I just feel like 1/2 the reason to use a CPA is to help save money (other half being time) and if you aren’t going to be up front about major costs, it’s hard to trust you to begin with. A simple, just to let you know this is about 8 hours of work so it’ll be $1500-2500 is all I ask for.

Any thoughts?


UpstairsComputer
LSU Fan
Prairieville
Member since Jan 2017
681 posts

re: Accounting charge for moving from Llc to S corp
Not even close. It's a form they have filled out 250 times before. I'd ask for clarity or a description of the services. Maybe this is for the whole year for everything? There has to be some mistake.

This form: f2553

This post was edited on 9/17 at 8:33 am


rmc
LSU Fan
Zachary, LA
Member since Sep 2004
24555 posts
 Online 

re: Accounting charge for moving from Llc to S corp
Man I spent an hour discussing with mine and she suggested I do the form myself so she wouldn't charge me for it. It's that easy of a form to fill out. I got a bill for an hour.


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The Spleen
Alabama Fan
Member since Dec 2010
25602 posts

re: Accounting charge for moving from Llc to S corp
The actual filing takes about 15 minutes.

I'd ask them for a breakdown of the charges as that seems excessive. There is possibly some accounting changes they need to make on their end, but that wouldn't take much time either.


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SLafourche07
New Orleans Pelicans Fan
Member since Feb 2008
6317 posts

re: Accounting charge for moving from Llc to S corp
Are you doing it retroactive for 2019?

If so they probably charged you extra to hand write a few words at the top of the page.


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baldona
Auburn Fan
Florida
Member since Feb 2016
10438 posts

re: Accounting charge for moving from Llc to S corp
quote:

I'd ask for clarity or a description of the services. Maybe this is for the whole year for everything?


Not my full year expenses. I have additional charges for my business return ($550) and for some small time we discussed something else.

I appreciate the help. My understanding without explicitly asking was this was just our time spent together on this and minor paperwork. I was expecting $500-600 in billing.


RIPMIKEVI
LSU Fan
Baton Rouge
Member since Oct 2016
15 posts

re: Accounting charge for moving from Llc to S corp
I charge approx $200 and that's with the meeting to discuss. You need to look into it


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hubertcumberdale
LSU Fan
Member since Nov 2009
1461 posts

re: Accounting charge for moving from Llc to S corp
What is the threshold amount of income where it makes more sense to form an S-corp vs LLC? I currently have an LLC but my income has been increasing the last few years and am trying to decide whether or not an S Corp would reduce my overall my taxes, but from the added CPA fees it appears to be a wash


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LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
17364 posts

re: Accounting charge for moving from Llc to S corp
I recently was involved with a re-org for a group of related companies.

First, the attorneys converted two of the three companies from statutory Corps to LLCs. Then, they created a new LLC to be a holding company. Then, they transferred all the ownership to the new company.

All the paperwork for that from the attorneys was close to 10 grand.

We did the S election for the new company, an S Subsidiary election for the old company that remained a corporation, and did a change of taxable entity form for the other two existing companies to make them disregarded entities.

I charged $500 for the four forms. I then charged $900 for some consulting related to the transaction - mainly checking for any Built in gain and any E&P issues.

So $1400 for the forms and about 5 hours of tax planning issues.

My rates aren't near what a "top 5 southern" firm would charge, but the difference isn't that great.

$2100 for a single S election form is nuts... but if you had a partner spend an 8 hour day doing consulting and calcs that could hit $2100. But you should have known about it.


donRANDOMnumbers
New Orleans Pelicans Fan
Hub City
Member since Nov 2006
15143 posts

re: Accounting charge for moving from Llc to S corp
All depends on how your company is built.

I just spent months researching for my wife who is a 1099 physician. I switched her from an s-Corp to a single member LLC.


baldona
Auburn Fan
Florida
Member since Feb 2016
10438 posts

re: Accounting charge for moving from Llc to S corp
quote:

All depends on how your company is built.

I just spent months researching for my wife who is a 1099 physician. I switched her from an s-Corp to a single member LLC.


Interesting. I'd think with that income an S-Corp would be better. The basic rule of thumb that I have seen is around $100k of income/ salary.



baldona
Auburn Fan
Florida
Member since Feb 2016
10438 posts

re: Accounting charge for moving from Llc to S corp
quote:

My rates aren't near what a "top 5 southern" firm would charge, but the difference isn't that great.

$2100 for a single S election form is nuts... but if you had a partner spend an 8 hour day doing consulting and calcs that could hit $2100. But you should have known about it.


FWIW I said top 5 biggest CPA firms, that's just from their website I don't know about "best". I needed to go with a bigger firm because I do some slightly complicated business dealings with some family entities so I wanted to better insure they were experienced or had someone that was.

I appreciate the help. I haven't had a chance to bring it up yet with my CPA. I had to get them one last thing for my 2018 taxes...lol. Once those are done and we have everything submitted I was going to bring it up.

There is absolutely no way I spent anymore then 2-3 hours on this and my billing appears to be for 10 or more, which I wasn't expecting and that has been clarified as not normal. So I appreciate it.


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bobdylan
LSU Fan
Cankton
Member since Aug 2018
231 posts

re: Accounting charge for moving from Llc to S corp
At first I thought you were asking to prepare the scorp return, but just the election, yeah that seems very steep.

I’d inquire.


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donRANDOMnumbers
New Orleans Pelicans Fan
Hub City
Member since Nov 2006
15143 posts

re: Accounting charge for moving from Llc to S corp
if you are trying to max a retirement plan out on a 1099 single entity then you need about 350 of gross income to make it work.

by the time you write off expenses, then put away 50-56k of tax free retirement, then a "reasonable salary" there isn't much left to save on SE taxes.

and in a s-corp you will have more cost with a CPA for whatever bull shite they do.

as a single entity llc. i figured out what she pays quarterly, can practically cut all the checks now. taxes are done for the year.
now we just have the handful of monthly business expenses.

it's just a lot easier than S-corp. from my research at least


tigeryat
LSU Fan
God's Country
Member since Oct 2005
2838 posts

re: Accounting charge for moving from Llc to S corp
quote:

if you are trying to max a retirement plan out on a 1099 single entity then you need about 350 of gross income to make it work. by the time you write off expenses, then put away 50-56k of tax free retirement, then a "reasonable salary" there isn't much left to save on SE taxes. and in a s-corp you will have more cost with a CPA for whatever bull shite they do. as a single entity llc. i figured out what she pays quarterly, can practically cut all the checks now. taxes are done for the year. now we just have the handful of monthly business expenses. it's just a lot easier than S-corp. from my research at least


This.

and a better section 199A deduction.

I'm trying to get more of my clients out of S Corps, than into.


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LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
17364 posts

re: Accounting charge for moving from Llc to S corp
quote:

if you are trying to max a retirement plan out on a 1099 single entity then you need about 350 of gross income to make it work.

by the time you write off expenses, then put away 50-56k of tax free retirement, then a "reasonable salary" there isn't much left to save on SE taxes


There are issues with retirement plans and S corps as well. Limiting your wages also limits your ability to defer wages for retirement. So then you have to look at plans that allow you a match / profit share contribution to be at a very high rate. Those types of plans exist... but again at higher compliance cost.


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