Beyond the legal protection one giant advantage of a S-Corp taxed LLC (you have the option of having your llc taxed as a partnership, corp, or s-corp) is that you don't have to pay the 15.3% "Self Employment Tax" (which covers both your and "the employer's" side of social security / medicare) on all of your income. Say you make 120k/yr, you 1099 yourself for 40k as your salary (if you don't pay yourself any salary and you actively work for the business then the irs can decide what % of your income is salary) and take the other 80k as a dividend which you won't owe the 15.3% on.
Solo or LLC/S-Corp?
- Thread starter Spliffic
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my accountant/lawyer told me to go with S-corp. But seems lots of people say LLC. i think S-corp is easier to run and less fees up front, but i dont really know...
Good question. I also see more affiliates using terms/disclaimers pages that basically say "Oh, yeah, this is all made up". I wonder how much protection those actually provide. When you think about it, though, how many scammy products are pushed on late night TV with disclaimers like "Dramatization - not actual customers", "Your results may vary", etc.? At what point does it go from "buyer beware" to out-right false advertising?
Also, back to the original topic...I'm not sure about Canada, but in the US, there's more ways to setup your business than most people realize, and they are all different - I've noticed a lot of people using S-Corp and LLC interchangeably, but they're completely and totally different.
You can organize as:
1) Sole proprietor
2) Partnership
3) C Corporation (Incorporate as a corporation)
4) S-Corporation (Incorporate as a corporation, file an s-corp election)
5) Single-Owner LLC (Incorporate as an LLC with one owner)
6) Multi-Owner LLC (Incorporate as an LLC with more than one owner)
You'll want to talk to a lawyer and accountant who is knowledgable in the differences, but to sum up one key difference - with pretty much everything except a c-corporation, your profit at the end of the year (or your share, in the case of partners) passes through on to your own, personal tax return. The downside to this is that the profit ends up on your tax return even if you don't take the money out of the company - i.e., if you see a $100,000 profit one year, but leave $20,000 of that in the bank at the end of the year to use on next year's campaigns, you're still taxed on the full $100,000 profit. The upside is the business pays no taxes - it all passes on to you as an individual, and you pay everything on your personal tax return.
However, you do NOT want to pay self-employment tax. It's a pain in the ass. Sole propietors pay self-employment tax, and I believe some forms of LLC's pay it as well.
With a c-corporation, you are only taxed on your personal taxes on what the corporation actually pays to you each year. However, the downside is, the corporation also pays tax. So if the corporation makes $100,000 in profit, but you pay yourself $80,000, you'll end up with $80,000 of taxable income on your personal tax return and $20,000 of taxable income on your corporate tax return.
I really prefer s-corporations and c-corporations over LLC's, but the key is to find an accountant, discuss how much money you make, how you usually run your business, what your expenses are, the type of benefits you want to pay yourself, etc. and figure out what they're most comfortable with. Then, read up on the particular form of corporation/LLC/etc. they recommend so you understand it - there are a number of tax deductions I've discovered just by reading up on the differences between s-corporations and c-corporations, for instance.
Do you guys pay for a Registered Agent or do you just put yourself along with your home address?
Seems a bit unnecessary to pay someone to receive your mail then forward it to you....
Seems a bit unnecessary to pay someone to receive your mail then forward it to you....
Hello friend,
I no familiar on law of America but what if add disclamer on site? Disclamer so no actual test all product. Disclamer say some review base on information find on internet and other source about product and no can guarantee it all accurate.
Disclamer can also say review only for purpose of education. No is alternative for doctor advice and no have been proven.
Good luck bro.
Disclaimers are good if you put those in right from the start. But if you've sold 100,000 bottles of acai and then decide to put in the disclaimer afterwards, it is too late. If someone bought bottle number 99,999, there is a way to prove that your disclaimer was not there at the time of their sale.
LLC over here. Provides good tax benefits and is less expensive than doing an s-corp. Like many above me have said, get a GOOD accountant.
almost correct on the S-corp, except you dont 1099 yourself, you W-2 yourself for the "salary" portion (IRS rules only state that salary must be "reasonable", but never define what reasonable is), the rest is exactly correct, and a good way to save alot of tax money legitimately once you're bring in about 110k a year. Doesn't make much of a tax difference at lower levels of income.
I've been slacking on this. I wanted to incorporate before 2009. It is now Feb. 11 and I still haven't gotten to it!
Hello friend,
It possible to do incorporate for cheap. Have friend who use Incorporate Online, Incorporation Services, LLC, Trademark | MyCorporation.com to make LLC in America. He do it online and cost $200 American dollars.
Good luck bro
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