We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co

LLC w/ S-Corp status vs straight S-Corp?

el109el109 subscriber Posts: 1
edited June 2010 in Business Planning
I am looking to form a company and like a lot of ppl am trying to decide between an LLC and s-corp. I am based in NYC and i would be the sole person in the company to start off with. Estimated gross profits of hopefully $100-$200k. I have researched ad-nauseum about the differences between an LLC and s corp and from what i have found it seems at the end of the day for my purposes that an LLC has a slight advantage over an s corp due to less annual requirements such as payroll taxes etx.. which would lead to payer lower taxes as well as not having to file corporate tax return etc.. which would end up costing me anywhere from $500-$1000k per year less than if i went with an s corp. The only major drawbacks i found with an LLC are firstly the higher setup cost of an LLC which requires you to publish your formation in two publications (~$1600) however this cost is offset over two yrs of paying lower annual fees. The other and more concerning disadvantage i have heard is that an LLC is A LOT more likely to be audited than an s corp when filing a schedule C especially when the company has gross profits in the $200k+ range.My question finally is does it make sense to start the company as an LLC and than a few years down the road choose to be taxed as an s corp or should i just go with one or the other? Also can anyone tell what the major differences are between an LLC with s corp status vs straight s corp. Been hard to find anything concrete online?thx
Sign In or Register to comment.