Anyone have thoughts or suggestions on which way to formalize my business.
I’ve formed S-Corps in the past, but saw on legalzoom.com that LLC’s have the same protection but less maintenance (meetings, minutes). I spoke was a tax preparer/bookkeeper this week, and she said that an LLC’s net income passes through like an S-Corp but is taxed like self-employment tax (31%).
Is that true?
I’ll be the sole owner, and if I understand correctly, that is not a problem when forming an LLC (?)
Thanks
It isnt a problem being a sole prop.I too am a sole prop and I am becoming an llc and my atty and accountant tell me that I can continue doing all the things Ive done as a sole prop but I will have the protection of the llc. My income will still be based on my profit.
I have formed other companies that I went LLC, but for some reason (and I can’t remember why… I’ll keep trying to remember) my accountant really pushed for an S-Corp, even against the suggestion of my lawyer. Even though it’s more work, there was some other benefit to being an S-Corp for my window cleaning business. Be sure to keep your accountant and lawyer involved. The lawyer won’t like the extra front end work, I’m sure, but If the accountant can give you a reason to push it forward… I’d go with that.
