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View Full Version : US Specific: Incorporated, LLC, S-Corp, Sole Proprietor/DBA


amccomis
17th of March 2008 (Mon), 21:30
There are lots of full time photogs here, so I'm sure this is something people will have experience with.

What are the ups and downs of choosing to incorporate, operate as a LLC, S-Corp, or just stick with the Sole Proprietorship and run as "doing business as" (DBA) ?

I've had one guy (he's in the DJ business) operate as an LLC, saying it was better for him, but another friend says an S-Corp is better because it's taxed as personal income where LLC is double-taxed.

I'm confused. Is this better asked of an attorney or an accountant? Both seem to have some say in the matter (LLC providing liability shield, but S-Corp having financial benefits).

Is there some good reading on this anywhere?

Any suggestions appreciated!

GPR1
18th of March 2008 (Tue), 00:04
LLC's are not double-taxed. The income is passed through, like an S-corp. It's a C corp that is double-taxed. My photography right now is Sole Proprietor, but I would go LLC if I was doing much volume, for the tax pass-through with the liability shield. I own several other LLC's for other businesses I have.

All that said, paying an attorney for a little advice is always a good idea. You can find LLC document templates online, so you don't necessarily have to pay for the document to be written if it's a very simple structure.

John Mireles
18th of March 2008 (Tue), 02:29
Unless you're making a lot of money or have significant wealth, don't bother with either an LLC or S-corp. Depending on what state you're in, they're expensive to maintain and won't really do much for legal protection unless you're prepared to cross every t and dot every i. There's nothing wrong with a sole prop.

John

amccomis
18th of March 2008 (Tue), 10:07
Thanks for both your replies. Very insightful, very useful. A+++ :-)

GPR1
18th of March 2008 (Tue), 10:55
Unless you're making a lot of money or have significant wealth, don't bother with either an LLC or S-corp. Depending on what state you're in, they're expensive to maintain and won't really do much for legal protection unless you're prepared to cross every t and dot every i. There's nothing wrong with a sole prop.

John

In my state of Washington LLC's aren't too expensive. It's a $59 per year filing fee (opposed to $25 for the Sole Prop.). As long as it's what the IRS calls a "Single Member Entity" (just you owning it with no other partners) you don't even have to file separate tax forms; you use the same schedule and forms with your 1040 as you would with a sole prop. The last LLC I formed I got the WA state specific docs off a legal website for about $50.

All that said, I think sole prop. is fine unless you begin doing significant business or are worried about protecting assets. As I said, 30 minutes with a decent attorney can help sort out choices.