Hi big fan, very useful info, been following the show for yrs. Me and my wife have an LLC in a community property state (tx) since 2023 and been filling as a sole prop under one schedule C (avoiding the 1065). Granted there hasn’t been much profit (one year a loss and one less than 1k net), so allocating SE separately seems pointless other than doing the same work twice just in halving the numbers + the SE benefit is less than $50-100 for her, especially since I’m maxed out as a very high w2 earner (7 figure combined mfj income.)
Now as this business starts generating 4-50k+ and S corp starts to play a role, how should we proceed going forward? We are in 37% bracket, federal. Is it more beneficial for me to leave the LLC and just wife to become a single member? Or any other structure that could benefit us better. Our business profits going fwd will be 53%+ taxed if staying in LLC and even with an S corp, I don’t get the full SE tax benefit since maxed out already on w2- the employer fica piece is extra cost. Any guidance is much appreciated. Thanks