Description:
For independent professionals deciding how to structure their business, the choice between an LLC and electing S corporation status affects taxes, liability protection, and administrative burden. LLCs are simple to set up and offer liability shielding with flexible taxation, while S‑Corp status can reduce self-employment taxes for higher earners but requires payroll, stricter recordkeeping, and sometimes additional state filings. Which makes sense depends on your income level, profitability, benefits plans, and tolerance for compliance—run numbers and consult a tax pro before committing.
2 Answers
Choosing between an LLC and an SCorp can feel like picking between chocolate and vanilla ice cream—both are delicious, but it depends on your flavor! An often-overlooked perk of an LLC is that it offers more flexibility in profit distribution among members, which can be a game changer for freelancers who work with partners. Plus, fewer formalities mean you can focus on your craft instead of drowning in paperwork! But hey, how much paperwork are you willing to handle?
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