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.
First, let's address the corporation vs sole proprietorship issue since it is a major decision and impacts all else. I personally advise all my clients starting a new venture to either form a corporation (coupled with an S Corporation election) or an LLC. The reasoning is that either structure legally separates your venture and its activities from your personal life. Then, if there is a lawsuit or other problem, the business stands on its own and your other personal assets and income cannot be touched. After the remainder of my remarks I will provide some information concerning each of these (in separate posts) to help you understand this a bit more.
1.The after cash tax flows in either of these choices would be about the same with one exception. As a sole proprietor you would be subject to the Self Employment tax (a corporation is not subject to that) which is a tax of approximately 13% for Social Security and Medicare. This would bring the sole proprietorship net cash available lower than that of a corporation.
2.As a sole proprietor you are taxed on the business profit whether or not you take it out. Accordingly, there would be less available for business reinvestment in a sole proprietorship. The net available would be about 52% after taking into account your 35% tax rate and the 13% self employment tax.
3.Please see my earlier remarks.
Now, onto the S Corp/LLC issue. You should choose whichever is less costly to form. The ongoing cost is similar but the formation costs vary by state and locale within a state. NY is less costly for an S Corporation than an LLC, some states the opposite is true. Information in the next posts.