Monday, November 12, 2012

TIPS60 - Choosing Your Business Entity - S-Corp, LLC, or Sole Proprietor?

Here is another of our videos offering tips and inisights into the business of photography. a transcript of the video is included after the jump.

(Continued after the Jump)

TRANSCRIPT:There's a big difference between being an S-Corp, an LLC, and a Sole Proprietor. I would strongly encourage you, for a variety of reasons, to strongly consider being an S-Corp. An S-Corp gives you really substantial tax benefits. I am not an accountant nor am I a lawyer, so this should not be construed as legal advice or tax accounting advice. So talk to your lawyer, talk to your accountant about this. But a Sole Proprietorship is a great way to start your business. I started my business and ran it for over twenty years as a Sole Proprietorship. I then took a second look and really should have done it sooner and determined that an S-Corp really was the better way to run the business. By being an S-Corp it actually costs you less in taxes, it allows you to write things off differently, and here's a big deal from someone who has been audited by the IRS, the probability of you being audited by the IRS, when you're an S-Corp, is a fraction of what it is when you're a Sole Proprietor. Sole Proprietorship who write off in Schedule-C's often get audited and certainly at a much higher rate than an S-Corp. So look carefully at your options.

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