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 » From: Dewey, OK Dear TaxMama: Is there an advantage in having an LLC AND an S Corporation if you are the only employee in a consulting business? Or can you have both? Sharon Dear Sharon, Sure. To your Tax Pro. And your attorneys. We get paid at least twice as much for the two tax returns and the extra consulting. And perhaps the extra bookkeeping. Unless you're making a LOT of profit (and we are talking 7 figures or high 6 figures) why put yourself through the extra cost and headaches? We are structuring something like this for one client, a couple, who are anticipating profits of more than half a million dollars each year. But, Sharon, each entity gives you some liability protection. None give you protection from your own acts. A good attorney can always pierce the veil of your corporation if your advice or services causes a problem. I did think of one reason why you might want both. And that is if you are planning on taking on investors. Attorneys seem to think that adding members to an LLC might be easier than adding shareholders to an S-Corp. In that case, you would run your business in the S-Corp, with the idea that the LLC would own certain aspects that you're willing to sell off. You may have other, more complex issues that I don't understand. So, you just might want to consult with your own team of experts to structure things so that they work best for you. Best wishes, Eva Rosenberg Your TaxMama  |
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