We can do better than noisy and confusing google results by grounding this discussion with our personal experiences. If you have an entity, which one did you incorporate? Why? What did you learn?
Checking as C Corp means Double taxation while S Corp or LLC are pass through Entities.
If you have a requirement then C Corp fine if not you can search about S Corp or LLC - as legal structure similar but more paperwork in C Corp'
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'LLC is a good starting point for most if you are starting a small business. A local CPA can get it running for you. Laws are state dependent.
But, don’t throw in the towel on C-corp; if it were that bad ‘double taxation’ - no business would be a c-corp.
First, taxes are only on profits. And the c-corp federal tax rate is 21%, that is lower than what your LLC will be taxed in if you take the money on your personal income tax - assuming your household income is > 200K or so.
So if you want to reinvest profits back into business, c-corp has lowest corporate tax, flexibility and deduction strategies.
The double taxation issue is with taking dividends from C-corp back as owners. But you dont’ have to take dividends. You can also pay yourself a bonus.. which is taxed as usual personal income tax on W2 + it’s deduction for the business as payroll.
Anyway - this is nuanced. But my point is, don’t misunderstand the narrative online on ‘double taxation’ of C-corp without looking more into it.
few other pointes to consider
S corp - all owners need to be citizen / permanent residents;
LLC - can be many things; partnership, taxes as c-corp etc.'
Copying over discussion from WhatsApp
'Would C Corp help your business?
Checking as C Corp means Double taxation while S Corp or LLC are pass through Entities.
If you have a requirement then C Corp fine if not you can search about S Corp or LLC - as legal structure similar but more paperwork in C Corp'
--
'LLC is a good starting point for most if you are starting a small business. A local CPA can get it running for you. Laws are state dependent.
But, don’t throw in the towel on C-corp; if it were that bad ‘double taxation’ - no business would be a c-corp.
First, taxes are only on profits. And the c-corp federal tax rate is 21%, that is lower than what your LLC will be taxed in if you take the money on your personal income tax - assuming your household income is > 200K or so.
So if you want to reinvest profits back into business, c-corp has lowest corporate tax, flexibility and deduction strategies.
The double taxation issue is with taking dividends from C-corp back as owners. But you dont’ have to take dividends. You can also pay yourself a bonus.. which is taxed as usual personal income tax on W2 + it’s deduction for the business as payroll.
Anyway - this is nuanced. But my point is, don’t misunderstand the narrative online on ‘double taxation’ of C-corp without looking more into it.
few other pointes to consider
S corp - all owners need to be citizen / permanent residents;
LLC - can be many things; partnership, taxes as c-corp etc.'
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Couple of points...
S- Corp is American Citizen or Per Res only.
EIN is same day as it is from. IRS site...