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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6100
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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I'm about incorporate a company and choosing between a

Customer Question

I'm about incorporate a company and choosing between a California LLC and a Delaware C-corp for my software consulting business. I'm the only person in the company and plan to reside in California, and some of my clients are here as well. I'm also an alien non-resident, about to receive an O-1 visa sponsored by the said company in about to incorporate. I need advice on what kind of corporate entity is the best for me and how should I proceed with my taxes.
Submitted: 22 days ago.
Category: Tax
Expert:  Stephen G. replied 22 days ago.

Hello, my name is***** goal is to give you a complete & accurate answer. I am working on your request now & I will respond as soon as possible.

Expert:  Stephen G. replied 22 days ago.

Normally, I would advise that you form an "S-Corp" for a software consulting business, but as a non-resident alien, as you probably know, you are not eligible to be an owner-employee of an S-Corp.

Alternatively, I would suggest that you form a CA LLC as that will be the most efficient way to do business since you are going to be living in California. As you may know, an LLC is disregard for federal income tax purposes, and as such, being the owner-operator of the Company, you will be able to file as a Sole Proprietorship (Schedule C) with your Form 1040 NR as well as with your CA return.

That will eliminate a lot of Federal & CA administrative accounting, income and payroll tax reporting that would be required should you operate as a regular "C" corporation. That could easily add an additional $2,000. - $2,500. of accounting, payroll accounting, payroll taxes and workman's compensation insurance to the business with little or no benefit beyond what you will have with your Limited Liability Company (LLC).

In any event, if you aren't familiar with US tax laws, I recommend that you establish a relationship with a local CPA that will be available on an "as needed" basis to answer questions and to prepare your income tax filings to make sure that you are using all available business and personal deductions, to reduce your income taxes in accordance with our federal and state income tax laws.

Steve G.

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