Business formation

Should I be an LLC or an S-Corp?

Short answer

An LLC is the simplest way to start. The S-Corp election can save self-employment tax once the business has steady profits, but it requires paying yourself a reasonable salary through payroll.

We speak Spanish and English. Hablamos español.

How to decide

LLC

The simplest way to start.

S-Corp

Can save self-employment tax once the business has steady profits, but it requires paying yourself a reasonable salary through payroll.

An LLC can elect to be treated as an S-Corp by filing Form 2553. For the election to apply from the start of the year, it must be filed no later than 2 months and 15 days after the beginning of the tax year. It pays to run the numbers before deciding.

Form 2553 is used to elect S-Corp status.
Deadline: 2 months and 15 days after the tax year begins.