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From a tax standpoint, the S Corporation definitely affords you the best tax advantage, and here is why. If you operate a multi member LLC, you can choose to be taxed as a partnership, and all of the partnership earnings are subject to tax in the year earned, and all of the earnings are considered to be from self-employment. The same is true if you operate a single member LLC. That means that you and any other partners pay not only federal and state income taxes on the profits, but you also pay the full share of social security and medicare taxes. Those two taxes combined is 15.3% of your net income. If you operate a single member LLC, you are basically considered to be a sole proprietor and are subject to the same very tax rules as the partnership, meaning you pay federal and state income taxes plus social security and medicare taxes on all of your earnings. If you choose to be taxed as a C Corporation, then you have an issue with double taxation. With a C Corporation, shareholders may draw salaries from the company, and you could leave some of the profits in the corporation as retained earnings for capital or for future use. But those profits would still be taxed at corporate tax rates, and once you withdraw them from the corporation, they are then taxed to you again at the personal level as dividends. If you choose the S Corporation status, you must pay taxes on the full amount of your earnings each year, but you can split those earnings by classifying some of them as salary and some as dividends. The IRS requires that as a shareholder of an S Corporation, you must pay yourself a reasonable salary. A reasonable salary would be the same amount of pay that someone else in your profession is being paid for the equivalent amount of hours you devote to the business. The salary that you pay yourself will be subject to federal and state income taxes as well as the social security and medicare taxes discussed earlier. But, everything you earn that is over and above your salaries, you may then withdraw those amounts as dividends, which are not subject to the social security and medicare taxes. So you automatically save 15.3% in tax on any profits that you can declare as dividends. The S Corporation by far offers the best tax advantage and seems to be the #1 choice for people in this day setting up a new business for that very reason. If this was helpful please press the Accept button. Positive feedback is also appreciated. Thank you jonk and let me know if you have more questions.