How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask CGCPA Your Own Question
Category: Tax
Satisfied Customers: 3820
Experience:  over 40 years experience in tax matters
Type Your Tax Question Here...
CGCPA is online now
A new question is answered every 9 seconds

I currently have a sole proprietorship in Pennsylvania that

Resolved Question:

I currently have a sole proprietorship in Pennsylvania that I've been thinking of converting to an LLC. My lawyer has advised me that, due to a lack of real liability issues for my profession (I'm a comic book writer), I should only consider forming an LLC if there are tax benefits for me to do so. Can anyone give me an overview of what sort of tax benefits an LLC might give me over a sole proprietorship (if any)? I have no employees (and am unlikely to ever have any) and would be the only member of the LLC if it existed. Thanks.
Submitted: 5 years ago.
Category: Tax
Expert:  CGCPA replied 5 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.


As a single member LLC your income taxes would be filed using Schedule C of Federal form 1040 just as they are now. Therefore there would be no tax advantages. The only advantage of any substance would be in the area of legal protection.


An S Corporation would have another advantage for you and is worth considering. It would permit you to have the S Corporation hold ownership to all copyrights thereby enabling you to transfer that to your heirs at some future time. At the same time you would acquire the legal protections of an LLC. The disadvantages to a PA S Corporation are formation costs which can be a bit high. They may not be as expensive as the LLC , however, since an LLC has publishing requirements.


In summary, an LLC offers you no tax advantages but does offer legal protections. An S Corporation offers the same legal protections as the LLC and has the added advantage of transferability of copyrights to future generations.

CGCPA and 5 other Tax Specialists are ready to help you