Not as much as you might think, Hans
The travel rules
apply both to employees and business owners, regardless of the entity type.
The states that I provided that the tax foundation listed as the most business friendly that have no corporation tax at all are the following:
South Dakota: No corporate or individual income tax
Wyoming: No corporate or individual income tax
Nevada: No corporate or individual income tax
Washington: No individual or corporate income tax
Finally Delaware is highly touted as a good state for incorporation, but unless you're trying to do something on the cutting edge or are trying to keep your ownership anonymous, raise capital by going public, etc. they actually have the second worse corporate income tax in the nation.
Just factor in that the C-Corp, pays it's own taxes at corporate rates ... which means, among other things, that losses don't flow through to you individually, and you won't get the benefit
of a lower capital gains
tax on any sales of assets
You do have more ability to use tax
free fringe benefits
in a C-Corp, and given that yours is a service business, that may actually make the C-Corp better choice for you.
Do keep in mind however, that as you become more profitable, any dividends paid to you (this would be after you've taken your salary, and deducted other business expenses and paid taxes) … after having been taxed to the corporation … will be taxed again, as income to you (this is the double taxation
you hear about with C-Corps).
Hope this helps
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