Anna, there aren’t special “S corporation” minute taking and minute keeping rules… You would simply comply with the requirements for the entity you had set up. E.g., if your S corporation was actually (for legal purposes) an LLC, you might not keep minutes at all. (Refer to your LLC operating agreement if this is the case.) If your S corporation was for legal purposes a corporation, you’d keep the S corp minutes the way you would for a regular corporation. (If you have questions about what your corporate by-laws or state corporation laws require for minutes, probably you want to talk with a local attorney.)

That might work. But I’d suggest you consult with a CPA … and then provide that person with all the details of your situation.

You maybe also want to look at this blog post: http://evergreensmallbusiness.com/should-you-use-an-s-corporation-for-a-sideline-or-part-time-business/

Thank you so much for that information! Hoping to bother you with one last question……….I’ve also been reading on your site about reasonable salary. According to salary statistics in my area, Realtors make an average of $39,000 per year, which is approximately the equivalent of $20 per hour full time.

If I do Real Estate Sales PART time, could I track my time worked and pay myself $20 per hour as my reasonable salary? Maybe even play it more safe and pay myself $30 an hour so I’m paying an even more fair share of taxes?

Do you think that would be considered an ok method and reasonable?

Thank you again Steve, and I really appreciate all of the information on your web-site and in your e-books, they are fantastic!

You don’t need to consult a tax attorney. Congress, the group that makes the rules, discussed in 2014 whether someone like you could use an S corporation. Here’s a longer write-up about their discussion, but clearly you can do this…

http://www.scorporationsexplained.com/what-is-a-disqualified-S-corporation.htm

As far as the effective date, you can’t have an S corporation until you have an entity that’s eligible to make an S corporation election… That means that if you create an LLC on June 1 that the soonest you could have an S corporation would be June 1.

The law says you’re supposed to make your election by the 15th day of the third month… (So that would be by Aug 15 if you formed an LLC on June 1.) But currently the IRS accepts about any excuse if you miss this date and follow the late election relief procedures. For what it’s worth, nobody who understands the current law and practices in this area would disagree about this.

Good luck!

P.S. Check out the FAQ at the S corporations explained site I linked to earlier. That website of ours provides tons of good background info for someone in your situation.

I am a Real Estate Agent (not a broker) and I want to form a PLLC and elect S-corp status to take advantage of the self employment tax savings. I know other Realtors that do this personally, and see many websites on-line that talk about this strategy for Realtors. I became concerned however, when I did see that some (not all) accountants feel that this strategy is not intended for the sole owner/employee professional.

So my take away from your article above is that you believe that it is ok as long as I pay myself the reasonable wage?

Do you think even though this loophole exists, that the IRS purposely targets sole owner/employee professionals for audits in attempt to take this advantage away from us?

Do you know of a tax attorney that takes the same position that you do, and would go to bat for someone like me if the IRS did challenge me on this matter?

In your Final Comment, you mention filing S election by March 15. What if I do not start my PLLC until June for example. Don’t I get 2.5 months from my business formation to make the election? Or is that when I would need to put the Late Election wording on the top of Form 2553? This is another point where I seem to hear different opinions.

Thank you Steve, I greatly appreciate your website articles, and your e-books!