LLC to SCorp Analysis Pricing

Hi all,

Does anyone have an average pricing for a New York based restaurant owner looking to elect S corp treatment from his current single member LLC which he has been filing as on a schedule C?

I did an initial look and the owner is already paying himself a salary and seems to already be operating as an LLC. However his quickbooks will likely require some cleanup.

Any help would be useful!

For S Corp analysis I charge $350 or $550 depending on the client. For a restaurant I would charge the $550. Note that I'm not a CPA, just an EA.

For cleaning their books however, I would be very careful with a restaurant - they are always so transaction heavy and messy.

Last time the client had pizza sauce all over the books. Just kidding - that's not what I mean by messy.

But I would go high here, or by the hour. ($350 an hour)?

Payroll too - - it's always a pain in the neck with restaurants. So much employee turnover and teaching them how to handle tips and things.

For the 1120s tax return, I get a little extra as well. You have to handle the tip/payroll tax credit and likely a few other additional items.

So for the analysis - that's easy (relative). But for the other stuff, be careful not to under quote for a restaurant. It's not like it's a owner/employee consultant s corp. Much more work - even with similar numbers.

I might be in the minority here and I've definitely have thought about it, but I normally don't charge just the file a 2553, but a majority of my clients that I've filed them for don't really require so much of an analysis because I clearly see their in the income ranges that benefits and I try to look for pitfalls like possible distributions in excess or 357(c) income. It takes me all of 15 minutes to fill out the form, but I can see where I could get a quick fee (like a lawyer setting up a single member LLC). I'd definitely request to be able to look at the books to get a feel for how long you feel the clean-up work would take and make that a separate engagement from any on going monthly or quarterly engagements. I'd also make them pay the fee to cleanup the books upfront, meaning you don't start the work until you get paid.

I agree that the analysis is easy, but it does take some experience. For example, I just learned by running a planning, that there are instances where even high earners with day jobs will benefit greatly from an s corp if they are not a SSTB.

My point is that there is value in our analysis, even if it only takes us 5-10 minutes (it "really" took us 10 years or more plus 5-10 minutes).

For current clients, I also do not charge additionally for this (it's built in to the price) and I likewise don't charge for the 2553.

For non-clients or new clients, however, I charge a fee for all of the above.

I did an initial look and the owner is already paying himself a salary and seems to already be operating as an LLC. However his quickbooks will likely require some cleanup.

There is no such thing as "already operating as an LLC - did you mean to say already operating as an SCorp? I guess that started in 2022? Because paying himself a salary while a Sch C is incorrect. And then what do you do if you determine that an SCorp is NOT in his best interest and you have to undo payroll to make them a draw? The correct usage of the words matter here so that you get the advice that actually applies to your situation.

(Sorry - just my pet peeve. One has to deal with it from clients who don't understand the significance/meaning of the words, but a tax pro should be specific.)

You charge for this? Wow. I don't know how much analysis is required....when I see someone earning more than reasonable salary, I just explain the SS savings and cost of inc. and we're done. Granted the QBI wrench is left alone, but I don't see how that's enough to offset the SS savings.

I did an initial look and the owner is already paying himself a salary and seems to already be operating as an LLC. However his quickbooks will likely require some cleanup.

There is no such thing as "already operating as an LLC - did you mean to say already operating as an SCorp? I guess that started in 2022? Because paying himself a salary while a Sch C is incorrect. And then what do you do if you determine that an SCorp is NOT in his best interest and you have to undo payroll to make them a draw? The correct usage of the words matter here so that you get the advice that actually applies to your situation.

(Sorry - just my pet peeve. One has to deal with it from clients who don't understand the significance/meaning of the words, but a tax pro should be specific.)

You are absolutely right, I meant operating as an S-Corp! I am glad you caught that!