Sole Proprietor vs LLC vs S Corp: Which Entity is BEST for Business Taxes?

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  • čas přidán 29. 06. 2024
  • By a Trusted CPA: Which is better - a Sole proprietorship, LLC, S-Corporation, or C-Corporation?
    Become a Tax Client: mycpacoach.com/tax-planning-s...
    Find out the best business entity to save on taxes by watching this full video.
    Subscribe: bit.ly/2HJlq46
    Your tax expense can greatly vary based on the entity you select for your business..
    And by greatly, I mean thousands if not tens of thousands of dollars.
    By the end of this video, I hope that you’re saving thousands and not paying thousands more than you have to in taxes.
    Outline:
    Intro: (0:00)
    Legal vs Tax Entity: (1:15)
    Pass-through Taxation: (1:50)
    Double Taxation: (2:30)
    Self-Employment Tax: (3:05)
    Taxes for Sole Proprietors & Partnerships: (4:10)
    Taxes for LLCs: (5:50)
    Taxes for S-Corps: (7:15)
    What is a Reasonable Salary?: (9:05)
    Which Entity is Best for YOU?: (10:20)
    Want to learn more about LLCs? Watch our LLC playlist: • The Best Business Enti...
    Interested in talking with someone from our team? Sign up to get notified when we are accepting new clients here: lyfeaccounting.com/coming-soon/

Komentáře • 151

  • @pursuilife3065
    @pursuilife3065 Před 3 lety +31

    best breakdown ive seen thus far!

  • @AvatarWanTV
    @AvatarWanTV Před 3 lety +11

    Your channel is like a GOLD MINE. Thank you for these! You saved me thousands in taxes.

  • @crissaness
    @crissaness Před 2 lety +1

    Thank you! Very clear presentation of information. Incredibly helpful!

  • @iamdetour
    @iamdetour Před 2 lety +1

    Clear and concise brotha!!! Bravo! had to dig through 100 other vids about this and they all lacked clarity.

  • @Abaines2222gaming
    @Abaines2222gaming Před 2 lety +7

    This was such a helpful video. You did a great job at simplifying something complex as taxes to a person who only understands little about the topic. I learned a lot from this video! Thank you! I just subscribed!

  • @law_of_theza5198
    @law_of_theza5198 Před 2 lety +4

    Thank you so much! Sitting here with my paperwork to register my new business scratching my head. Explained perfectly and easy to understand!🙌🏽

  • @MsHinds-cp1oq
    @MsHinds-cp1oq Před rokem +1

    Thank You all so much for putting this is laments terms. You guys are teaching me more than what I learned in school. Please continue the good work. Good bless you all and CZcams University🎉😊

  • @cobylyons4439
    @cobylyons4439 Před 2 lety +1

    I'm so glad I found your channel! I'm preparing to start a private practice as an Expressive Arts Therapeutic Coach/Facilitator, and I'm exploring the best way to set myself up

  • @mrwolf3397
    @mrwolf3397 Před 2 lety +1

    This is the most unfold easy explanation I've seen so far.. great job..

  • @terrandysart3587
    @terrandysart3587 Před 2 lety +1

    Best, most detailed, yet still simple video of these topics of found so far. Thank you so much

  • @LR-jm8oc
    @LR-jm8oc Před 2 lety +2

    Your breakdown of how an LLC is taxes is so clear and easy to understand! I appreciate this, especially since I'm starting a company shortly. Thank you for sharing and I will be following your advice and channel.

  • @eliezermeisels
    @eliezermeisels Před měsícem

    Very clear and to the point, also very well presented, really great video!

  • @briquellecollier6188
    @briquellecollier6188 Před 2 lety +2

    So clear and concise!

  • @CharlesTV0707
    @CharlesTV0707 Před 2 lety +1

    Excellent video! Very informative and clear. Thank you

  • @casaslex
    @casaslex Před rokem +1

    Really, really good JOB!!!! You and your team did a really good jo!!!

  • @rtanaka
    @rtanaka Před 3 lety +8

    Excellent content as usual. Thank you. Keep it up!

  • @AllStarFilms
    @AllStarFilms Před 2 lety

    Thank you very much for making that easily understandable! Fantastic job thank you for your time and your effort really appreciate it

  • @heidiwitherspoon485
    @heidiwitherspoon485 Před 2 měsíci +1

    Thank you for such a straightforward presentation!

  • @papabear4066
    @papabear4066 Před 7 měsíci +1

    Excellent information. I am starting a new business as a self proprietor and I needed this

  • @cassandrajackson8560
    @cassandrajackson8560 Před 10 měsíci +1

    Fantastic video! I'm going into my second year as a business owner and the stress of filing taxes has been unbelievable. This has reduced my stress ten-fold. There's been so much going on that I actually forgot that I subscribed to this channel (my bad). Today is a day that I took off to get it together and found this subscription. This.....This is why slowing down is super important! 🥰

  • @TooMuchToThink1
    @TooMuchToThink1 Před rokem

    Best channel on CZcams, love your videos

  • @KS-np6ph
    @KS-np6ph Před 4 měsíci +1

    That was very helpful and informative. ❤ Much appreciation. 🙏

  • @mariakayy22
    @mariakayy22 Před rokem

    Thank you on your clear explanation and the overall advice!

  • @SPER1
    @SPER1 Před 2 měsíci

    Very informative and helpful video, saving this for later!

  • @spencerhastings5523
    @spencerhastings5523 Před rokem

    Super concise and just what I needed on the last day to file.

  • @BrooklynCashmere
    @BrooklynCashmere Před 2 lety +5

    This is the question I’ve wanted answered since deciding I want to start a business. THANK YOU!!!

  • @cristiangutierrez382
    @cristiangutierrez382 Před 3 lety +9

    This is exactly the kind of answer I’ve been looking for for weeks. Great video

  • @TaraWagner
    @TaraWagner Před 2 lety

    I 100% agree. These tips are golden!! If a small biz owner grasps this concept from the start and has a supportive attorney and CPA they will be in great hands.

  • @therassistant
    @therassistant Před 6 měsíci

    THAT WAS SO HELPFUL!!

  • @AphroditeLee
    @AphroditeLee Před 2 lety

    This was GREAT! Thank you!!!

  • @MsTaLucifer
    @MsTaLucifer Před 2 lety

    You’re always very informative thank you so much you saved me money and time ❤️

  • @giftedafflicted
    @giftedafflicted Před 3 lety +1

    Wow this was soooo helpful, much much appreciated

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety

      Glad you got value out of it! Thanks for watching.

  • @16bitPRNTZ
    @16bitPRNTZ Před 2 lety

    Perfect I just started my business as an LLC but I'll be looking to switch it up next year.. 😎 great advice

  • @zoechaaban8340
    @zoechaaban8340 Před rokem

    Very informative. Thanks!

  • @lysaallman-baldwin7171
    @lysaallman-baldwin7171 Před 3 lety +1

    Excellent overview! Thank you

  • @paulettelaine2405
    @paulettelaine2405 Před 2 lety

    Thank you for the easy to understand explanation!

    • @LYFEAccounting
      @LYFEAccounting  Před 2 lety +1

      Glad it was helpful! Thanks for supporting the channel.

  • @mathurinelouis4528
    @mathurinelouis4528 Před 3 měsíci

    This is the most concise explanation I’ve received

  • @SavannahDubay
    @SavannahDubay Před 2 lety +1

    Thank you for this video, I'm starting my business and I wasn't sure which way to go. I think I have it more narrowed down now.

  • @lukasallenbaugh4728
    @lukasallenbaugh4728 Před 3 lety +1

    Thank you, this was super helpful!

  • @west92fnargle
    @west92fnargle Před 23 dny

    Great video!! Thank you

  • @christiansanchez982
    @christiansanchez982 Před rokem

    Great information, thanks!

  • @harleyehuffinejr2082
    @harleyehuffinejr2082 Před 3 lety +3

    Great video great information thank you for taking time out of your life to do these videos for small businesses like myself who's trying to self educate themselves and business independently

  • @mattsecuro2968
    @mattsecuro2968 Před 3 lety +2

    Great video great breakdown of how it works great job

  • @chanceisom
    @chanceisom Před 11 měsíci

    Great knowledge, thank you

  • @pauldunne7966
    @pauldunne7966 Před 2 lety

    Thank you so much, LYFE Accounting :-)
    Very on point, and greatly appreciated.

  • @StarlightAwakenings
    @StarlightAwakenings Před rokem

    Thank you! Very helpful :)

  • @Mywriteside
    @Mywriteside Před 3 lety +2

    Very helpful! Thank you 😊!

  • @dcasuto
    @dcasuto Před 9 měsíci

    Amazing. Thank you!

  • @ginnyschultz8952
    @ginnyschultz8952 Před 2 lety

    Very helpful! Typo at the 6:41 mark on the word single.

  • @lintsadvisors358
    @lintsadvisors358 Před 3 lety +1

    Great learning, Thanks

  • @tonyascreativespace3067

    this was great!

  • @GarneredBeauty
    @GarneredBeauty Před 2 lety

    This information is GOLD! Just started following this channel and it is more than what I was looking for. Thank you!! Can you recommend a channel that is similar to follow regarding bookkeeping/accounting-as in, understanding the balance sheet, p&l and income reports?

  • @Naswillshine
    @Naswillshine Před 3 lety +4

    Super helpful. This was a great breakdown.

  • @N8urecure
    @N8urecure Před 3 lety

    This is so well-explained and extremely helpful. Thank you.

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety

      I appreciate it! Just curious, what part did you find most helpful?

    • @N8urecure
      @N8urecure Před 3 lety

      @@LYFEAccounting the clear communication of the whole breakdown :)

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety

      @@N8urecure Awesome!!

  • @angeljurado2227
    @angeljurado2227 Před 3 lety +1

    this video is sooo goood!!

  • @cafevirtualconrociocabrera3692

    Great information

  • @simonerose2358
    @simonerose2358 Před 3 lety +1

    Yes it did help, thank you!

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety

      Thank you for watching! Just curious, which part did you find most helpful?

  • @avowedindependent3934

    Thank you so much!

  • @makeupbyariona
    @makeupbyariona Před 3 lety +2

    Great video

  • @mike-yp1uk
    @mike-yp1uk Před 2 lety

    Excellent material

  • @jeffstowe4860
    @jeffstowe4860 Před 2 lety

    Thank you sir.

  • @seanstandberry4082
    @seanstandberry4082 Před 3 lety

    Great explanation

  • @williambreeze2659
    @williambreeze2659 Před 4 měsíci

    Thanks you!

  • @perryd43
    @perryd43 Před 2 lety

    Thank you for the post neighbor

  • @zanderhuynh7998
    @zanderhuynh7998 Před rokem

    I love to watch your videos. Please clarify these 2 questions:
    1. When you said 50000 income to switch to s - corp, do you mean after all deduction or do you mean revenue?
    2.do you pay tax on distribution base on your personal tax brackets?

  • @Gi_Lovely
    @Gi_Lovely Před 2 lety

    Amazing 🤩

  • @pedroa1731
    @pedroa1731 Před 3 lety

    Thank you!

  • @briantezo9232
    @briantezo9232 Před 2 lety

    That dogs face was totally me at that moment.

  • @peacal247
    @peacal247 Před rokem

    Great content! Which entity do most independent [Salesman] contractors choose for tax benefits?

  • @yannmondon9821
    @yannmondon9821 Před 3 lety

    Great vid

  • @Kingzar1000
    @Kingzar1000 Před 2 lety

    Perfect 👌

  • @COGFS
    @COGFS Před 11 měsíci

    Great work here. This was very helpful . MUCH appreciated! Liked👍

  • @yayathemogul1205
    @yayathemogul1205 Před 2 lety

    This is very helpful! Are the words distributions, income and profit all interchangeable when considering whether or not an LLC or S-Corp is right for you? For example, Do LLCs pay taxes on all income as in "revenue" or only the profits?
    From my understanding distributions are payments made to LLC owners from profits. Then owners are only taxed on the amount of the distribution NOT the entire income/revenue of the business. Correct?

  • @brendabelled7081
    @brendabelled7081 Před 3 lety +1

    Yeah I’m subscribed

  • @skwerl81
    @skwerl81 Před 2 lety

    Ok, this video is glorious, thank you! Here's where I get caught up - at 10:05, what would I do with the extra $30,000? Right now I'm a sole proprietor, so I would get taxed on that but obviously then it would be accessible to me. If I put it into my business as an S-corp, what would I be able to do with it? I guess just use it for business expenses? (I don't have many)... or invest? 🤔 I would so appreciate any thoughts!

  • @Mike.Sadala
    @Mike.Sadala Před 2 lety +1

    This stuff is a headaches. I see why people don't start businesses

  • @wang1guhn
    @wang1guhn Před 2 lety

    I created my LLC in July 2021as a single member. I wasn't aware that I had to file an ECE with the IRS and it had to be done within 75 days of formation until today! I was told that i don't want my LLC to be automatically classified as a Disregarded Entity. The problem is I'm not sure what classification I should elect. I would like to pay as little self employment tax as possible.

  • @tsw4510
    @tsw4510 Před 2 lety

    I have a question I hope you're willing and able to answer...What if you own multiple businesses and your total salary for all businesses are over 50,000 a year, will you recommend have all of them s corps for filling purposes?

  • @johnlasure6273
    @johnlasure6273 Před 2 lety

    Greetings - love your videos. Tried to apply on your website for a consultation. Looks like your system isn’t accepting more customers. So I’ll try asking you my Question here:: if I have both the LLC and an inactive S-Corp setup for my existing business, can I treat the LLC like an S-Corp and take a reasonable salary and separate income distributions to save on SE taxes without going the full S-Corp way? Further, I’ve elected to opt for a solo-401k and plan to use the 100% option of personal contribution of $26k (I’m 60), is the employer (20%) portion taken before or after business expenses? I’m trying to minimize my taxable income to the lowest possible amount and shelter as much pretax income to my Solo-401k as legally possible, while keeping my taxable income as low as possible to minimize my self employment and tax burden. My 1099 income is currently about $175k per year. I hope you can help me….

  • @sinathimas3380
    @sinathimas3380 Před 2 lety

    If I have an SLLC I would have to file with my personal taxes? Does this change my income bracket if I work full time at a 9-5 job or does the IRS separate that?

  • @theself5738
    @theself5738 Před 2 lety

    So I can wait several months before going for S-corp? What are the federal tax brackets for an S-Corp?

  • @nonpuzzles
    @nonpuzzles Před 3 lety +1

    Can you make a video about Re-Investing into your business. I want to know if you can invest your salary, back into your business, how does that work and how would you put that in the system in QuickBooks or any accounting software? I know it is suppose to show up on the financial documents... but how is it supposed to show up on financial documents? When I start a business, I want to reinvest my first 6 month earnings towards the debt/loan... but I am not sure if we are allowed to do so. :) Thanks

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety +3

      Hmm. This is a complex question and not specific advice since we don't know the whole situation.
      But in general, you can only reinvest profits into the business without it being taxed, and even that would depend on your entity type. The moment, you take a salary or distribution, that money is taxed. Now of course, you can reinvest money into your business at any amount, especially after taxes

  • @jasonhunter7223
    @jasonhunter7223 Před 2 lety

    How do you know if your state requires the owner to b a P-corp?

  • @gabrielestrada4803
    @gabrielestrada4803 Před 3 lety +1

    I'm a dole proprietor and I'm a dealer for manufactured homes. Should I change to a LLC? I still am working my full time job but plan on quieting in the future. Dealer is a side hustle but soon main hustle

    • @VattanaThach
      @VattanaThach Před 3 lety +2

      Yea. It'll protect your personal assets.

  • @Kairi327
    @Kairi327 Před 3 lety +1

    I need assistance here... I didn’t establish my LLC until mid February. However, on eBay, I exceeded $1000 total of sales since the beginning of the year. I am a seller in the state of Illinois. My receipts of the item I sold are still kept, however one receipt applies to more than one item sold. How do I file the income from those sales, versus LLC? Is this filed together? Is there a different form? Every CPA firm and Attorneys aren’t taking new clients at the moment, I believe it’s because people rushing their taxes... I’m trying to figure this out before I have to file for next year.

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety

      If your LLC was setup this year and your money was earned in 2021, then you don't have to worry about filing taxes right now

  • @MamiGotHer0wn
    @MamiGotHer0wn Před rokem

    So in my case filing a Single member LLC and elect to file as S Corp is best

  • @IbrahimAli-xe9iz
    @IbrahimAli-xe9iz Před 4 měsíci

    What if I open S corp without LLC ? If someone wanna go after me , do I still have protection of my own assets? Also, another question. With S corp, if I made 100k and had 85k experiences , do I still have to do w2 for myself? I know I am gonna pay taxes for the rest 15k, but I don't pay extra 15% taxes on 15k

  • @1ccvickers
    @1ccvickers Před 2 lety

    Is it true That my Holding company LLC can't own my individual LLC if I select it to be a S-Corp?

  • @aylinsanchez8785
    @aylinsanchez8785 Před 2 měsíci

    When u mean start getting bussines income over 50k a year that is the gross or net, please let me know. Thanks

  • @vilipaama2679
    @vilipaama2679 Před rokem

    How do you elect to s-corp for tax when i need to file?

  • @angelface4870
    @angelface4870 Před 3 lety +1

    I am a sole proprietor how do I categorize the funds that I have deposited from my personal account to my sole proprietor business account to keep my business afloat?

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety +2

      You can do a bank transfer? But for purposes of taxes, it is irrelevant

  • @klipperartist8874
    @klipperartist8874 Před 2 lety

    So I prematurely elected to file as an S-Corp, considering I don’t make profit yet and am still trying to get out the red… with that being said, do I still have to pay myself even if my company is not making money yet? If so, is there a way to revert back to an LLC until my business becomes profitable? Really wishing I seen these videos last year when I was starting my business 🙂🔫

  • @christineseeley7497
    @christineseeley7497 Před 7 měsíci

    You said a "2253" form but showed a 2553 form. Which one is correct?

  • @jonathankerner2094
    @jonathankerner2094 Před 2 lety +1

    Thank you! Super!!
    I learned: an LLC is a corporate entity while Scorp is a taxation mode or status.
    LLCs offer liability protection.
    If I have cash flow going in my savings account how is that taxed?
    I wonder, what about my day job income?

  • @MiirG5
    @MiirG5 Před 2 lety

    I'm starting a esports center, I'm in partnership with my wife, what is the best tax entity to file with?

  • @nostalgicgamer1363
    @nostalgicgamer1363 Před 3 lety

    Starting a home daycare I hear so much about LLC vs sole priority I can’t decide which route to take. Any suggestions?

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety +1

      I would think you want some protection with an LLC if you are doing daycare, but it really comes down to your preferences

  • @ashyascruggs-ei1tg
    @ashyascruggs-ei1tg Před rokem

    So does a company with a llc that doesn’t make at least 50,00 yet not pay taxes until they hit 50,000?

  • @juliajam7929
    @juliajam7929 Před 3 lety +1

    Hello, thank you for information. Can you tell me please, can i put my expenses in taxes for my small business with llc?

    • @LYFEAccounting
      @LYFEAccounting  Před 3 lety +1

      You can deduct business expenses. Do you have partners or are you a single member llc?

    • @juliajam7929
      @juliajam7929 Před 3 lety

      @@LYFEAccounting i will be single member. Thank you for reply.
      I want to start small candle business on etsy, if I understand you right, better to start with llc, right?
      Thank you again

    • @juliajam7929
      @juliajam7929 Před 3 lety

      @@LYFEAccounting or s corp? I'm confused, very confused:)

  • @station08
    @station08 Před 5 měsíci

    What if my S.P. is my name in all caps? The same one all my bills come addresses to?
    So basically DBA My corporate identity.

  • @Hrjekkrjfbneemskjfjennwmakkf

    Just have justification for the reasonable salary. Don't be a goblin and take everything as a dividend. If you are a dentis, 30% of production, move on, if you are a business manager, 90k and move on. DONT OVER THINK REASONABLE SALARY, JUST BE REASONABLE.