Which way to go as a o/o? I heard good things from both stand points.:argue:

 

S-corp. Get away with paying less taxes, avoid double taxation on SS and less likely to be audited.

 

I prefer a corporation with the S election (sub chapter s). An LLC might work for you buy I have owned corporations for so many years that I am more comfortable with that business format. The S corporation offers ways in which the smaller owner can save on taxes such as social security tax and is an easy way to keep your personal and business separate. With the S election you are not taxed twice on income. I am not sure about the LLC. I prefer things to be simple in business.

 

The one thing you do have to do with a "sub-s" is to be sure you file for it every year. LLC you don't. For me the "sub-s" is the best route to go. Like G-MAN said: Keep it simple!

 

Check with the state you live in.Wi. requires a simple filing every year. it is done online and costs $35.00.

Wikipedia has good info on LLC versus Sub S read up on it, there are advantages to both.

 

The sub chapter s election is a one time filing with the IRS. It has nothing to do with your state. When you incorporate you do so as a corporation. States should not make any difference between a regular corporation and an s corporation. There is no charge at the IRS to fill out the form. The main reason to file the election is for the way you are taxed by the IRS. The sub chapter s election is prevents you from being taxed twice. A regular corporation pays taxes on earnings and then any shareholder who receives dividends also pays taxes on those dividends. Under the s election earnings can be passed on to the individual and only the dividends are taxed. Basically, the s election is treated as a partnership as far as the IRS is concerned. Other than the tax benefit the only difference between a sub chapter s and a regular corporation is that a sub chapter s cannot own another corporation whereas a regular corporation can. In my state I must file an annual report and a franchise and excise form each year. The annual report fee is $20.00 and the minimum on the franchise and excise tax is $100. There is a formula where you could pay more depending on your earnings and assets. There is a minimum fee of $50 per person with a $300 minimum annual charge for the LLC. There is also a difference in incorporating. Incorporating as a regular corporation in my state is $100. A LLC costs $50 per person with a minimum cost of $300. So, it seems that it costs less for a regular corporation in Tennessee. You will need to check in your state.