Forming a Corporation or LLC
Determining the best entity for your business is a complex but important decision that you will make. Simply put, Corporations and LLC's both offer liability protection. On the other hand, the income taxes required for each can be far different depending on your business's situation.
Legal and Tax Benefits of LLC's and Corporations
At Taxes PhD, Eileen Jacobs is an enrolled agent with over 30 years experience saving customers money on income tax and setting up the proper business entity. There are alternatives, such as attorneys or online forms. However, Eileen will save you far more in taxes than the amount of money spent with an attorney and time spent doing the process by yourself.
A FREE consultation is offered for any new or existing business to discuss your best combination of liability protection and tax savings. At Taxes PhD, we have NO LARGE UPFRONT FEES. At Taxes PhD, we guarantee we will be thorough and act in your best interest.
Shown below is a basic chart of the differences between an LLC and S-Corporation:
| Item | S Corporation | LLC |
|---|---|---|
| Liability Protecion | Yes | Yes |
| Operational Control | Board of Directors & Officers | Member or Manager |
| Federal Income Tax | Pass through | Pass through |
| Flexibility | Record keeping rules & Formalities | Ease of operation |
| Restrictions for owners | Yes | No |
| Tax Policy | Payroll taxes for salaries; no payroll tax on dividends | Self-employment tax on net income |