Advantages/ disadvantages of S Corp VS LLC

its not a simple answer. llc allows certain freedoms...no need for meetings and minutes for example. lower start up costs (no corporate filings). but all net income from an llc is taxed the same as a sole proprietership, ie. paying self-employment tax (both sides of medicare and social security). with s-corp, you can pay yourself a fair market salary, and any net profits can be given to the owners as distributions, taxed at lower rate. llc dies if one of the owners dies or declares bankruptcy, scorp does not. a good idea would be to go to the small business administration and read up, so you can make an informed choice.

 

Tax reasons aside, one of the primary reasons for establishing an LLC or S-corp is for liability protection, protecting you, your home, etc. from being sued when it should be against just "the company". For that reason, you have to show that the legal entity is not just a cover for that. Lawyers will try to "pierce the corporate vail" and go after you if they can so you should also consider which entity you can best maintain compliant. As pokerhound67 said, for an S-corp, you need to have board meetings, keep minutes of the meetings, etc. If you don't, it's easy to go after you personally. An LLC only requires one meeting a year.

 

i was told the main reason to have an LLC is if you get more than one truck, if not, then you may as well go sole proprietorship because the liability will be the same, taxes are the same, and simpler to function

 

CA is a state that comes right out and tells you if you are sole person in LLC you are treated as individual. Well, except they let you pay corp taxes.

You need advise based on state you are in. LLC is state designation and Corps are federal.

States treat these different. In IL it is more expensive for LLC vs. S-Corp on taxes.

Also, more forms on your taxes with LLC. So if person doing taxes charges based on forms then it will be more expensive on return.

 

As a one truck owner operator there is no hiding from the liability . In a catastrophic event you either get sued as the owner or as the driver. But your butt is on the line.

So the only real difference is taxes, a good local accountant is priceless .

 

Why are you asking this? Did you not read the posts? Seems you need to talk to a professional in CA to determine if this is even worth it. $800 a year minimum corp tax (LLC or Corp). Are you going to save that in taxes? There is zero liability protection.

 

Can you do it all yourself? Yes, you can. It'll save you that 1,300$. Its basic info needed to obtain your authority/dot and all the good stuff. There is a thread on here for obtaing your authority and what is needed. Search is your friend! Good luck