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What is a Professional Corporation? | Mark J Kohler | Tax and Legal Tip

What is a Professional Corporation? | Mark J Kohler | Tax and Legal Tip


Hi, Mark Kohler here with another tax legal tip I want to talk about the professional corporation a lot of confusion about this topic When do I need a PC professional corp when does when does it make [sense]? and is it something I have to do and are there any tax benefits to boot so let’s hit the highlights and see if we Can point you in the right direction when it comes to a professional corporation? Now let’s look at the big picture and put it in perspective and For those that [have] seen my videos before or read my book you [know] where I’m going with [this] we got to talk [about] where The Corporation fits now the first point is a professional corporation is for operations. You’re not going to hold real estate with it It’s not for investments It’s not for holding. So when we look at our left side [right] side, and we’re on the Ops side or the asset side over here is where we’re going to have our lLC’s and LPS, and [slps] and blood about all this to hold assets not talking about that right now today. This is this is about the PC professional Corporation that you’re going to run a professional business in now, you don’t have to have a professional Corporation or PC unless you’re in a certain category of services so the PC only applies to Professional services in fact that’s what I want to clarify here. We’re talking about dentistry doctor chiropractic engineer CPA lawyer psychotherapist, and frankly the [list] can vary from state to [state] [in] In the safer rule is here If you’ve got a professional designation after your name some sort of initials because you’ve got a license And you’ve had to register that license with the state There’s a good chance the state’s going to require you to be a PC They don’t want you to be an lLc or an int. They want to be a PC now There’s a variation on this in some states called the p LLc or professional limited liability company It’s kind of the sister to the PC or professional corporation So why are we talking about all this when does it make sense? This makes sense because it’s going to save you taxes, and it’s going to give you asset protection the slip-And-falls of clients for customers [so] [there’s] the asset protection benefit that comes with an entity and the tax planning benefit folks you’re going to make an s corp election that’s right a PC could be an escort a pllc can make an s election because in the eyes of the irs I want you tax as an s corporation, so when this these professional services come in expenses Go out you get [your] net instead of paying self-employment tax on the total amount in an lLc or a sole proprietorship We’re going to do our salary dividend explai and we’re going to save and I call it a salary dividend split You could call it a salary net income split and This is where you get a w-2 and a K1 Watch some of my other videos on when an escort makes sense because the s corp Is what your PC is going to become or your p LLc? And I’ve got a whole chapter in my book tax and legal playbook on the p on the s corporation whether again It’s a PC is irrelevant, but I’ll tell you again. We give a quick example the other day [I] was registering a client. That was a chiropractor in a particular state. We registered as an INC and The state shot it down. So know if you’re going to be a chiropractor you have to be a PC Then I was in another state, and we registered as a professional corp under certain psychotherapy designation and they didn’t like the subject line or The purpose of the company they wanted it specific to what the state regulatory body wanted so what I’m trying to say [here] is don’t get mad at our law firm or And you try to do this online in evitable you’ll probably screw it up And that’s not to be offensive let a law firm do this We’re eight hundred bucks for an entity and any state To keep it affordable and simple and I get you an hour with an attorney to design it particular to you And it’s not eight hundred plus finally be done, and you know it’s going to get done, [right]? But don’t be mad at us. There’s some red tape. That’s the problem That’s why I give some of these examples it can be just a red tape rabbit hole when we’re trying to choose the right Acronym or right letters after your name and make sure it complies with the state and the regulatory body But in the at the end [and] reduce is great You’re going to be an s-corporation and just to put this in the big picture again your escort might be a partner in a bigger LlC like a professional group so this would be the group of doctors the law firm the accounting firm the engineering firm the social working firm whatever then everybody is a PC, and those are the individuals in the partnership very very common and if you’re not using this s corp strategy Frankly your accountants operating in the old school and you’ve got to get a review and look at some sort of change usually around the end of the year to get the right type of entity and structure as a Professional now that was far [more] than a two minute tip. I’m sorry I get carried away. I love this topic I want to help so many people better live their American [dreams] save taxes and get the right structure rather than some guy in or gal in a cubicle in Nevada trying to sell you an entity you don’t need or people just playing around on a website Taking a shot in the dark [please] get some professional help if it’s not our law firm find a law firm that’s affordable and Understands taxes and don’t just let them say oh set up an LLc Well, you’ve got to talk about the tax issues, and how powerful this s corp is every dentist doctor engineer, lawyer CPA broker real estate Investor they’re doing fix and flips internet market or social work or psychotherapist. We’re all s corporations That’s where we want to be now. How you maintain it? How you operate it How you set it up? And what letters are after your name is where the legal advice pays off? don’t try to cut corners in this and then be jacked up at the end of the process, so hopefully, that’s a message that will help you in your quest to be a professional and save taxes and better succeed in your Likelihood so good luck and keep living that American dream Thanks so much for watching it if you found that helpful Please look in the description below I’ve got links to my tax and legal library my quickbooks training videos how to start a small business 50 60 70 videos some as long as 30 minutes explaining more information on tax and legal strategies that will change your life also [if] you’d like to subscribe to my newsletter or check out my So media links please click here their weekly free tips and strategies and articles that you’ll find extremely helpful And I would appreciate it if you subscribe to my channel. I’ve got so many videos here I produce every week on my Youtube channel and I’d love to give you a ping every time I shoot a video Thanks so [much] and keep living the American dream

Comments (5)

  1. Money sucker Associations

  2. If not required to be a pllc, are there still advantages to be a pllc over an ordinary llc?

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