Posted on Sunday, 26th April 2009 by admin
Business Directory
I’m looking to start a computer service business in South Carolina, and I’m on the fence between choosing an LLC vs. a Sole Proprietorship. What would be best from a tax standpoint?
I’m looking to start a computer service business in South Carolina, and I’m on the fence between choosing an LLC vs. a Sole Proprietorship. What would be best from a tax standpoint?
I’ll initially be working for myself but might eventually hire employees.
This business will be my only source of income, and the main expenses will be advertising (~$2,000 – $10,000) and software purchases ($1,000). The business should bring in about $50k gross the first year.
I will initially be working with home computer owners, although I would like to expand to service other businesses once the company has gained a reputation.
If I’m leaving out important details, please ask and I’ll add them.
Thanks!
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Tags: Computer Service Business, Sole Proprietorship, Start Business
Posted in 970 | Comments (7)
April 27th, 2009 at 3:20 pm
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check with local IRS office, you can be a LLC and Sole
Propietor.
April 29th, 2009 at 9:38 pm
New York City Job Listings
From a tax standpoint, it doesn’t matter 2 cents. An LLC is a disregarded entity. You’d file the same return either way and your tax bill would be the same.
An LLC helps protect your personal assets from liabilities of the business, that’s all. Unless you’re in a risky business and likely to be sued, a good general liability insurance policy will be cheaper than the costs associated with establishing and maintaining an LLC.
You do NOT need to be organized as an LLC to get an EIN. You will need an EIN if you have employees but can get one as a Sole Proprietor. (And you can get one to use in lieu of your SSN even if you have no employees.)
April 30th, 2009 at 3:05 am
I thought about the same subject… 4 years ago…
LLC or Sole Proprietorship from tax standpoint?
It’s interesting question because… it all depends on what this business will be in about 10 years from now.
We can all dream and believe “in future I’ll be a billionaire”
… yet it can only be true if we actually DO THIS or ACHIEVE IT.
And I’m not going to say why I would prefer LLC or Sole Proprietorship or any other form of business… because I believe it all starts from What is THE VISION of your business… and once you know your vision…
all you have to do is get one of those tax attorneys who you’ll tell your vision and he/she will work the plan for this.
May 1st, 2009 at 3:02 pm
New York City Job Listings
Go to you will find a lot of answers there. But a LLC would be the best choose because if there would be a problem and someone would sue you thy would only get money from the business if thy would win. If you are a Sole Proprietorship you could losse all that you owen and the business too. The LLC puts a cover over your personal assets that you own and you can not be sued personally only the business can. I hope this helps. Mell
May 3rd, 2009 at 2:10 pm
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As a bookkeeper in upstate SC I would recommend going with an LLC. just one reason is after you apply for an ein you will not have to give out you personal SSN for resale tax purposes and you never know what your future will hold – you may end up having to hire an employee. Any other questions please email me.
May 4th, 2009 at 7:19 am
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From a tax point an LLC doesn’t exist. If you don’t set it up to be either a C-corp or S-corp you’d be treated for tax purposes as a sole proprietorship, with reporting income and expenses on a Schedule C for your 1040 tax return.
And for state purposes an LLC can be expensive. Massachusetts has an annual $500 fee that an LLC is required to pay.
May 7th, 2009 at 4:24 pm
Small Business Web Hosting
An S-Corp and and a sole proprietorship are similar from a tax standpoint. A C-Corp is not.
Any LLC is much better than a sole proprietorship for reasons having nothing to do with taxes. If someone sues an LLC, all they can get is what the LLC has; they do not get any of your other property. If you have a sole proprietorship, they are suing you, and you can lose everything.