For the majority of small business owners, all that an LLC delivers is higher setup costs, higher annual fees due to New York State, higher audit risk, and higher taxes.
Yet, so many people are forming LLCs these days.
Why? I chalk this craze up to misinformation. The two biggest culprits of this misinformation include uninformed websites touting LLCs and attorneys/accountants steering entrepreneurs towards the LLC so that they can charge higher setup fees.
For most small business owners, the S-Corporation still reigns supreme...significantly lower setup costs, significantly lower audit risk, lower annual fees due to New York State, and potentially significantly lower taxes.
If you are at the stage of determining which type of business is best suited for you, feel free to contact me for a free analysis of exactly how much tax you can save and how much lower your audit risk will be by forming an S-Corporation instead of an LLC.
If you have already setup an LLC and are now kicking yourself for doing so, cheer up. There is a three-step procedure that we use in order to petition the IRS to tax your LLC as an S-Corporation. We have been successful with 95% of the petitions we have filed. Taking this step is much cheaper, easier, and cleaner than shutting down your current LLC and setting up a new S-Corporation.
Effective Tax Planning for the MicroBusiness is in stores now.
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