LLC vs S-Corp?

Question

I am thinking about starting my own business primarly focus on software consulting. I am a full time employee of another company and don't want to quit in near future. I don't have any partners. Can you please help in chosing LLC Vs S-corp.

I have gone through the differences between these two from http://www.powerhomebiz.com/vol136/structure.htm

As I am working for another company, I still have to pay employment tax of 15.3% on net profit in case of LLC.
In case of S-Corp I can take the net profit as dividend so that I don't need to pay the employment tax which makes me lean towards S-Corp. I am hearing LLC is best for small company. I'd like to know which one is best for my situation?

Second part of my question is can one person start the LLC without any managers.(I am the manager and owner)

Answer 1

Most important is to get started and the business.

As a software consultant you may fall under a "personal service corporation" check on that first.

Best to see a local accountant about your specific business and potential risks.

Both are reported on your personal income taxes.
Good accounting can minimize the tax impacts

Second Part: In most states, yes. It is a "single member LLC)

Answer 2

There are pros and cons. There are some slight differences in LLC's from state-to-state. You should contact a good local accountant to help you decide from a tax standpoint.

Answer 3

A silent companion at 6% won't cut back it. you will possibly choose somebody possessing ninety one% and additionally you will possibly might desire to furnish under 20% of the sales. own provider firms. a company is a private provider enterprise if it meets all here standards. Its primary pastime throughout the time of the “attempting out era” is appearing own centers (defined later). commonly, the attempting out era for any tax 365 days is the previous tax 365 days. If the enterprise has in simple terms been shaped, the attempting out era starts off on the 1st day of its tax 365 days and ends on the faster of: The final day of its tax 365 days, or The final day of the calendar 365 days wherein its tax 365 days starts off. Its worker-vendors appreciably carry out the centers in (a million). This requirement is met if greater effective than 20% of the enterprise's reimbursement fee for its events of appearing own centers throughout the time of the attempting out era is for inner maximum centers achieved by worker-vendors. Its worker-vendors own greater effective than 10% of the honest industry fee of its staggering inventory on the final day of the attempting out era.