Comments on: 6 Things Self-employed Should Know From the IRS https://smallbizsurvival.com/2012/02/6-things-self-employed-should-know-from.html The small town and rural business resource Wed, 27 Aug 2014 12:45:29 +0000 hourly 1 By: Sterling https://smallbizsurvival.com/2012/02/6-things-self-employed-should-know-from.html#comment-5192 Sat, 11 Feb 2012 22:52:29 +0000 http://smallbizsurvival.com/?p=222#comment-5192 In reply to Marshall Davis.

That’s an excellent point and my first thought. There is no reason to pay the high sole proprietorship or partnership rates when an S corp is an available option. However, I have set up an S corp in KY, and I have to tell you that you need to consult a CPA first. There are many different forms you have to file. I have also closed an S corp, and again, there are many different forms to file on different levels, federal, state, and local.

]]> By: Marshall Davis https://smallbizsurvival.com/2012/02/6-things-self-employed-should-know-from.html#comment-5190 Fri, 10 Feb 2012 02:06:01 +0000 http://smallbizsurvival.com/?p=222#comment-5190 If you are going to go full in when it comes to being self-employed, you might want to consider forming some type of business entity, such as an LLC or Corporation. For example, we are an LLC that is taxed like an S-corp, which just means that our company doesn’t pay any taxes – we do at a personal level. This eliminates the double-taxation issue a company being taxed as a C-corp can encounter.

There are definite tax, and personal liability protection, advantages to operating under a formal business structure.

I am not an accountant, so definitely get some professional advice before deciding on the right course of action for your company. Just know that there might be some tax advantages to being other than a sole-proprietor (which is what you are if you don’t have a formal business structure).

It is also a lot easier to get a business banking account if you are operating under a formal business structure…

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