Hi, my wife recently set up an LLC for her medical practices, she is the only member. She also has a full-time job in a hospital which will issue her W2 regularly. Her W2 income is much more than her business income as she just started her own practice a couple of weeks ago. We heard that we can change our LLC to S Corporation, then pay my wife as an employee (W2) which may save us taxes?
I am not sure why this would save our taxes, given my wife has a W2 from hospital and W2 from her own business, the income on the W2 will be taxed no matter if our business makes any profits or not.
Our prediction is the revenue of 2021 will be lower than our initial investment and expense for the business. if we file the business as LLC so the business loss will be deducted from our total income this year. but if we do S corporation, then we will be taxed on the W2s with no business loss benefit?
Can someone help us to understand if LLC or S Corporation will help save taxes for our situation?
both of us have W2s from our regular jobs.
