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LLC or S-Corp?

What entity structure should I be?

The question that countless business owners ask themselves. However, there is not a one-size fits all answer. Rather – owners should evaluate the pros and cons of each.

Sole Proprietorship

Pros

  • Easy and cheapest to set up (<$50)
  • Avoid franchise tax (~$800/yr)

Cons

  • Virtually no liability protection
  • Unable to optimize cash flow through business deductions
  • Full Self-Employment Tax

LLC

Pros

  • Low formation cost (<$100)
  • Personal asset protection
  • Cash flow optimization through business deductions

Cons

  • Full Self-Employment Tax
  • Subject to franchise tax (~$800/yr)

S-Corporation

Pros

  • Minimize self-employment tax → overall tax
  • Personal asset protection
  • Cash flow optimization through business deductions

Cons

  • Need to run payroll for employees
  • Subject to franchise tax (~800/yr)

LLC vs S-Corp Case Study

Some Feedback

Hear From Our Customers

Clearbooks CPA was very communicative and organized and helped save me the most money possible. Was informed about the best way to deal with Bitcoin and crypto taxation. 10/10 would recommend.

Sai Vuppala

@Sai Vuppala, 3 months ago

I started an export/import and distribution business last year and my finances were a complete mess with my previous CPA. After my initial meeting with Sugam Sharma I knew he was the right fit for my company and I...

Shayer Aziz

@Shayer Aziz ,18 hours ago

Sugam provided exceptional service to me and my eCommerce business. He was able to help me with my sales tax filings in multiple states while also providing metrics to help me scale my business. As a CPA he has saved me a...

Rian Kapadia

@Rian Kapadia, a month ago