LLC vs S Corp: Tax Benefits, Differences, & Strategies 2024

LLC vs S-Corp, which one is best for your business? There are many small business owners who are seriously overpaying in taxes simply because they make the wrong entity selection to start off with or because they never try to optimize their entity for tax purposes.

Timestamps
Intro (0:00)
Overview of LLCs and S-Corps (1:20)
Differences of LLC vs S Corp (3:30)
Self-Employment Taxes (6:25)
How to Avoid Taxes (8:30)
Deciding Between LLC or S Corp (12:15)

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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

#llc #business

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Disclaimer: The information provided in this video is for entertainment purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

[adventuresofandy]

I was having confusions whether to go LLC vs S Corp and this video made me decide to go for LLC. I asked a doctor friend of mine who already have an established practice, and she suggested to choose S Corp. But I am just starting out so an LLC makes more sense. This video is very informative

[raphaelsanchez]

This was the BEST video I saw about whether to file as an S Corp or LLC. Clear, succinct, and with practical examples. Excellent work! Thank you.

[nikolaikrow]

Thank you for breaking it down this way! I've flip-flopped on which structure to use to begin my business. Now I realize I've been wrong the whole time...I need to BEGIN as an LLC and hopefully grow to need/change to S-CORP.

[robwithrbk]

At around the 10min mark is where he points out the primary reason to be an S-Corp...the share holder distribution that is untaxed. 100k in net income is zero'd / split up as 50k as a W2 and 50k as a K1. You still report the K1 on your taxes but it is not taxed. Literally, 50% of your income is not subject to any tax withholdings at all. I have been doing this for years with my accountant. I believe the IRS code says Corp shareholders can receive a "reasonable" distribution that is not taxed. It's generally assumed that "reasonable" is half...

[kronkron]

I appreciate your content. I would suggest people also consider the following. 1) the list of regulations, accounting costs huge difference, set up, servicing costs for the s-corp are substantial vs the LLC. 2) If an LLC is producing a K1 distribution into a SCH C the very same FICA tax benefit deduction is also available as employer/employee reducing the $15, 300 tax to $7650. 3) depending on state income tax laws the tax on profits to an S corp far exceed the tax limits on revenues to an LLC $11, 790 vs $15, 000 on business revenues of $5mil with profits of $1mil in California. 4) once you start an S-corp you cant go back to an LLC but if you start as LLC you can always go to S corp status

[TheWalkOnCoach]

Thanks for breaking down the consequences of becoming an s corp too early. Ive been searching for that info for weeks.

[carmenc]

THIS VIDEO REALLY HELPED ME DECIDING WHICH ENTITY TO GET. I WAS PLANNING TO FILE FOR S-CORP FOR MY PART TIME BUSINESS BEFORE WATCHING THIS VIDEO. DIDN'T KNOW THE TAX FILLING FEE WOULD BE SO HIGH (AND OTHER COSTS) FOR AN S-CORP. GLAD I FOUND THIS VIDEO!!! THANK YOU!!!

[mstevenchapman]

You just saved me from jumping the gun and going to file as an S-Corporation. I'm gonna wait to acquire some more assets and increase my clientele before I give myself the headache and cost of S Corp. Very informative vid. Thank You!

[JucSityBeatz]

So the moral of the story... We should start the LLC first.. and once you start making money you should switch to an S corp

[Zen_Nurse]

Omg, where have you been all these years⁉️Thank you so much‼️

[nomoreexcuses]

This has been thr BEST video Ive seen explaining in simple terms the pros and cons of filing as an LLC or an S-Corp. Thank you!!! Especially the recommendation at the end about when to file based on the soze of your business.

[Kistalradio]

Hi Sean, I have to say you are one of the best I have seen on thus far. Truly clear and concise

[sheilamoreland]

I not only liked this video. I Loved it! This was the most simple and clear explanation I've heard thus far. I'm so sick of people over explaining this. You just kept me from making a HUGE mistake in starting an S Corp tooo soon. I will most defiantly be hiring you in the upcoming year.

[hrstories]

This is clear and straight to the point.thank you.

[sumanpaladugu]

Excellent video ! Cleared my doubts and got clarity in deciding LLC vs S-Corp. Amazing work !

[tyfitzpatrick]

Thanks for describing when a LLC should switch to an SCorp! That was helpful!!!

[leneebookhardt]

Excellent video on helping distinguish between the two. Very informative!

[salinakif]

Great info delivered in a easy to understand and engaging manner!

[andregraf]

Such an good video. I was leaning towards starting the LLC S-corp right away, but after your points at the end of the video, it totally makes more sense to wait till I reach higher profits to justify the additional cost and headaches from the requirements in the S-corp world. Thank you!

[mortizmetzger]

Thank you so much for your info and your super clear presentation and options, this is the most comprehensive list I've seen on YT on this topic