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Solopreneur Money

Jan 25, 2021

Are you confused about switching to an LLC, an S-corp, or maybe even a C-Corp? If so, you are not alone. What are the differences between these options and which one is right for you and your business? That’s what we’re here to find out! If you are trying to understand how to best structure your business to take advantage of the tax opportunities available to you, then press play now. 

You will want to hear this episode if you are interested in...

  • The 2 main reasons to file as an LLC or S-Corp [1:52]
  • Examples that can help you understand how each type of business works [6:07]
  • A twist that can save you money on taxes [14:02]

Solopreneurs have 3 choices when it comes to filing their business 

  1. LLC - The Limited Liability Company (LLC) provides liability protections and has pass-through taxation as if you are a sole proprietor.
  2. S-Corp - The S-Corp also provides liability protection and has pass-through taxation, but you can become an employee of your business. This option will require regular payroll and payroll taxes.
  3. C-Corp - A C-Corp provides liability protection and is its own entity. The difference is that the corporation has its own tax bracket and its own tax return. It’s as if the company were its own person.

Why register your business as an LLC, S-Corp, or C-Corp?

There are 2 main reasons to register your business as an LLC or S-Corp. The first is liability protection. It is important to separate your personal assets from your business and that is exactly what an LLC, an S-Corp, and a C-Corp do. The more successful you are the more important this separation becomes. 

Save on taxes

The second reason to register your business as an LLC, S-Corp, or C-Corp is because of taxes. Highly profitable solopreneurs are highly taxed and the proper business structure can help you take advantage of tax strategies that could save you money. Listen in to hear examples of how you can structure your business in a way that provides you with the most tax savings. 

Use this FREE worksheet to help you choose

Obviously, you’ll want to consult with your CPA or tax professional as well as your attorney before making any decisions. The goal of this episode is to arm you with the background knowledge so that you understand your choices. Please use this FREE worksheet to help you walk through some personal examples. 

If you learned something from this episode, be sure to hit the subscribe button. Also, please share this podcast with a friend. Let’s get this knowledge out there to help as many solopreneurs as possible! 

Resources & People Mentioned

  • FREE Worksheet - Should you switch from a sole proprietorship to an S-Corp?

Connect With Gabe Nelson

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