S Corp with 100% ownership of LLC

[Teresa532]

1. My husband has recently established his LLC, and he holds 100% ownership. He is considering filing for S-Corp status for tax purposes. However, we would appreciate your guidance on whether it would be more advantageous to remain as a single-member LLC or to elect S-Corp status. 

2. As an LLC-S-Corp, what percentage of the total income would be reasonable to allocate for his salary?

Thank you for your advice.

[AmeliesUncle]

1) Without knowing your ENTIRE situation, business goals and retirement goals, unfortunately nobody can give you a good answer to that.

2) Salary is not based on a percentage of income, it is based comparable pay for the work performed.  If he is the only worker and if it is a service-based business, it is likely that a very high percentage of the profit would be for the 'work' that he performs for the business.

This is really something that needs to be discussed with a GOOD tax professional that can analyze your ENTIRE situation and discuss the many potential cons of the S-election.