Re: [taxchat] LLC or S or C-Corp

Passive income business always an LLC as there's never any chance of SE tax. Non passive income should be an S-Corporation at minimum. If they are building the company to sell it then make it a C-Corporation. If your clients are not true business persons and don't want to deal with the extra paperwork then they can set up as an LLC at the state level and elect to be an S or C. I find that most persons that want to avoid the extra paperwork never become good business persons as they are successful in their profession but have no clue about true business.

On Fri, Oct 24, 2008 at 7:51 AM, Arnold M. Socol <waymeans@verizon.net> wrote:

I gave a couple of classes this past  month at an adult education school.  I contributed to a 10 week program towards a complete business plan as the accountant.  As part of my material I was asked to discuss the different "entities",  sole proprietor, LLC, Corp, PTRs, etc.  I have always felt more comfortable with the Corp and S-Corp for small businesses.  One student said her research concluded an LLC was best for her.  Her reason - simplicity.  I advised that here in NYS the cost to become an LLC doubled with the cost of running classified ads in 2 newspapers for 13 weeks.  For these startups every nickel and dime matters.  After thinking about it it is less costly if they file as a single member disregarded entity on Sch C and not having to file an 1120 series return. The tax prep fees would be considerably less over time. Any thoughts on how you recommend the best entity for small startups.

 

Arnie

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