What is the difference between an S-Corp and an LLC?
Both the LLC and the S-Corp are similar in terms of the protection of the personal assets of those involved, so the differences are all unrelated to any legal protection issues, and are mostly tax and paperwork differences. Basically, there is a greater opportunity to save on taxes with an S-Corp. Many people choose the LLC because its a little easier in terms of the paperwork required on an ongoing basis. However, in many cases, the individuals involved would pay more tax with an LLC that with an S-Corp. This is because, in addition to income tax, LLC income is often subject to self-employment tax, or SE tax. This SE tax is about 15% of your profit, and is equivalent to Social Security and Medicare taxes that would be paid for an employee. With an S-Corp, you are required to have a board meeting and a shareholders meeting once a year, and to take and keep minutes of these meetings as proof. You also have to file a separate corporate tax return, which will show that the profit of the c
Both the LLC and the S-Corp are similar in terms of the protection of the personal assets of those involved, so the differences are all unrelated to any legal protection issues, and are mostly tax and paperwork differences. Basically, there is a greater opportunity to save on taxes with an S-Corp. Many people choose the LLC because its a little easier in terms of the paperwork required on an ongoing basis. However, in many cases, the individuals involved would pay more tax with an LLC that with an S-Corp. This is because, in addition to income tax, LLC income is often subject to self-employment tax, or SE tax. This SE tax is about 15% of your profit, and is equivalent to Social Security and Medicare taxes that would be paid for an employee. With an S-Corp, you are required to have a board meeting and a shareholders meeting once a year, and to take and keep minutes of these meetings as proof. You also have to file a separate corporate tax return, which will show that the profit of the c
