Sole Proprieter, LLC, S-Corp or C-corp, which one should I do?

Question

I've heard corporations are better for taxes and write offs, but here is the thing.....I'm Broke!!! My wife and I are developing servaral websites. All completly different, which require different types of business licenses. What is the best method or approach??? Any advice would be GREAT!

Answer 1

My husband's business is a sole proprietor LLC company. (Which cost us $300 to get the LLC license) LLCs provide the same tax benefits as a corporation gets. We have employees, pay unemployment taxes, payroll taxes, make quarterly estimated tax payments.....(he is an electrician). I would ask my accountant to be sure, or you can call the IRS. I have called them many times and they have always been very knowledgeable and helpful. Good luck to you!

Answer 2

You only need to go beyond a sole-prop if you think you may get sued easily or need to keep your personal liability separate from the company. An LLC is easier to set up than a corporation, and an LLC can choose to be taxed as a corporation (like an s-corp or c-corp) or they can be taxed as sole props/partnerships. LLC protect the individuals' liability, however taxes are the responsibilty of the individual members. A corporation is its own entity, all liability and tax responsibility is the possession of the corporation. An S-corp does not have to file corporate returns, but I think they are allowed fewer types of deductions. Corporations are more expensive to set up and require more paperwork to maintain. However, if your business is simple, a sole prop or an LLC is fine. Most business expense are tax write-offs no matter what your legal entity is so don't make your decision based on taxes.

Answer 3

You need to talk with a CPA and maybe even a tax attorney to truly see what your situation calls for. It is hard to give you exact advice without knowing all of your details. Here is a great article explaining the differences between these types of companies http://www.home-business-expo.com/8172006_Incorporating.asp.

The main reason to incorporate over staying a Sole Proprietor is to protect your personal assets in case you were ever sued or went bankrupt.

I hope this helps guide you in the right direction.

Answer 4

S-corp., but consult an accountant first. He can point you in the right direction. It cost me $125 to incorporate in Illinois, and should not cost you much more than that. A lot of the paperwork you can do yourself. Check out the book "Incorporate Your Business" by Nolo. They even include paperwork you need for any state you reside ni.

Good luck

Answer 5

I had a s-corp business with my ex wife. Right now have a llc building business. I would talk to a accountant who will help you out with your specific needs. But I would say llc. with s-corp you need to set up a payroll or dividends.. with llc you can do what you want with your money when you want to. you will have to pay taxes on the money depending on what the usage is for. ex. taking money to buy equipment for your business you dont pay taxes on that money but if you take money out for yourself you do. And you have no employees so to keep it simple I would say llc. good luck with your business.

Answer 6

I incorporated my Florida S-Corp for under $200. What state do you live in? I have contacts who can guide you to what would be best for you and your business.

Answer 7

There are entire law firms that do nothing but help people in your position figure out what corporate entity to use. Be careful and do some research, don't take advice from anybody on here. :)

Answer 8

Small business ideas and info are located in the link below. I work from home now and found quite a bit of help there...:)

Answer 9

Probably the S-corp is what you want.