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Level 1

Forming a new LLC



I am in the process of forming a new LLC and considering tax implications of certain decisions.  I have a full time job which fulfills my FICA requirements.  I would like to start the new LLC with my spouse who has been a house wife for a long time, we file taxes jointly.  My confusion is which option is best for me in terms of taxes:

1) If I start the LLC as a sole-prop then I will save on taxes since I won't have to pay for Social Security taxes since I am already paying it from my full time job.

2) If I start the LLC as a Partnership (with my spouse) then will there be a tax for her FICA, resulting in more taxes for the Business? or am I already paying her FICA since we file jointly.

3) If I start the LLC as a S-Corp and pay her as an employee then I would have to possibly pay FICA on only her wages and not the remaining distribution.


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