I keep seeing different prices for opening an S corp. Some places charge $500, while my current accountant wants $2500. I want to make sure it’s done right, but does it actually make a difference who does it?
Ask them what else they provide. It’s easy to find a filing service like LegalZoom that will incorporate your company, but that quoted fee usually doesn’t cover things like EINs (which are free), SOS filing (which can cost $20 - $300 depending on your state), minimum taxes (which vary), S-Election (which is free), 2501(f) filing (which is free), BOI filing (also free), etc. I think $2,500 is pretty high, but if they are offering full service and not just filing the incorporation, that could justify the cost.
Accountants usually don’t set up LLCs or corps, so I’m not sure what the accountant charges $2500 for… It’s really just an election for the 2553 after the entity is formed. Unless that includes setting up payroll or bookkeeping, but even then, that seems pricey.
When I worked in public accounting, we always had a few shelved LLCs ready for emergencies. The fee was high because we were set up to help right away, which saves time.
What do you mean by shelved LLCs?
It used to be common for lawyers and accountants to have several unused businesses stored away (called ‘shelved corps’ or ‘aged corps’). If someone needed to act quickly, they could buy an existing company, change its name, and have a business that had been around for over five years. It was useful for quick opportunities or getting credit lines.
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You need someone who gets S Corps. You need someone who can manage S Corp benefits, employee unemployment, 401K options, and more.
You can file Form 2553 by yourself. The IRS website has clear instructions.
Accountants shouldn’t be opening S-Corps; that’s a legal job for an attorney. Do it right, as you can write off the fees at the business level.
The person who posted this can also just register an LLC, and then the accountant can file the 2553. That’s not uncommon.
Sure, but the client should have articles of incorporation, record minutes, common stock, operating agreements, and so on.
Accountants handle this regularly. You don’t need a lawyer.
Accountants file the 2553. Most don’t deal with the operating agreement or articles; that’s strictly a legal matter.
Don’t pay someone for this. It’s pretty straightforward. Just create an LLC and file the S corp form yourself right away.