SERVICES

SOLE PROPRIETORSHIP

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This is the simplest type of business as it is a one-person, unincorporated

business, and there is no differentiation between the owner and the

business. All of your earnings, receivables, payables, and debts are your

responsibility. The downside is when your profits are taxed on a

Schedule C at a federal self-employment tax rate of 15.3% (known as

self-employment tax) before you pay a cent of federal income taxes.

 

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LLC

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Limited Liability Companies or LLCs are set up mostly for legal protection but can be incredibly

useful. The LLC is the most flexible and can choose to be taxed as a sole proprietorship (if there is only one owner), a partnership (if there are multiple owners), a C-Corporation, or an S-Corporation. Regardless of how the LLC is taxed, the entity provides legal protection for the business owner(s) and effectively separates the individual from their business.

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PARTNERSHIP

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Whether it be a limited partnership or a limited liability partnership, a partnership can be challenging and complex. Anytime you have multiple owners of a business, you have a partnership. A partnership's profits are generally also subjected to 15.3% federal self-employment tax on top of income taxes. 

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S-CORP or C-Corp

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Let us evaluate your business to see if you would have tax savings as a C-Corp. An S-Corporation also separates the business from its owner(s). Though S-Corporation owners also hold stock in their companies, taxation is completely different. The S-Corporations owners don't pay personal income taxes on the money drawn from the company, but those monies drawn from the business aren't deductible. The bottom line of an S-Corporation is taxed federally at personal income tax rates and is paid by the individual owner(s).  The IRS estimates that there is over twice the number of S-Corporations as C-Corporations in existence.