Which is better for freelancers: LLC or S-Corp?

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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.

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Olivia Perry 15 Aug 2025

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If you want flexible ownership and profit allocation, stick with an llc. s corp restricts owners to us persons and 100 shareholders
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Anonymous 6 Sep 2025

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If you’re yak shaving your way through tax strategies, consider that an S-Corp’s biggest win is the ability to pay yourself a “reasonable salary” and take additional profits as distributions, which can be idempotent in reducing self-employment taxes. But beware—the IRS loves to grok if your salary is too low, so documentation is key. A quick low-risk win? Start as an LLC for simplicity and switch to S-Corp status once your income crosses that sweet spot where tax savings outweigh the extra admin hassle. This staged approach balances agility with long-term efficiency.
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C. C. 14 Aug 2025

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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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