LLC vs S-Corp & Entity Choice
“I operate a highly profitable C-Corporation with massive excess cash reserves, what exactly happens if I do not distribute earnings and get hit with the accumulated earnings tax?”
When a C corporation keeps significant cash inside the business, the accumulated earnings tax question often turns on why the profits were retained, how much working capital is needed, and whether there is a documented business plan for future uses. In many cases, the issue is not just the size of the reserves, but whether the corporation can show a reasonable connection between those earnings and expected expenses, expansion, debt service, acquisitions, or other corporate needs. The practical effect can involve an additional tax layer and closer scrutiny of the company’s retained earnings, records, and board-level support for the accumulation. A short conversation with a CPA can sort out what applies to your specific numbers.
In your 90-minute session, the KGOB advisor handling it will:
- Read your exact situation and tell you, in plain English, what’s actually going on.
- Lay out your options and the trade-offs — no jargon, no judgment.
- Give you a clear next step you can act on, whether that’s with us or on your own.
“I formed a single-member LLC but forgot to get an EIN, can I just use my Social Security number on my Schedule C without issues?”
“I am transitioning my W-2 income into a consulting business, does electing S-Corp status actually lower my self-employment tax?”
“My solo business is making about the same as my old salary, should I switch from a sole proprietorship to an S-Corp?”
“I have a profitable side hustle on top of my day job, is it worth the administrative cost to form an LLC just for that income?”
This page is a prompt to start a conversation, not tax or legal advice, and states no tax-law specifics as fact. A consult session does not by itself create an ongoing engagement. We do not promise specific outcomes or savings. Kohari Gonzalez Oneyear & Brown PLLC — Charlotte, NC.
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