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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3806
Experience:  20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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I am being red as an independent contractor, going corp to

Customer Question

I am being hired as an independent contractor, going corp to corp. Should I create an S Corp, C Corp or LLC? I live in CA but will be contacting in NYC. I'm looking for the best option that offers the best write-offs and minimal taxes. I'm the sole person in the company but may want to expand to grow my business one day.
Submitted: 1 year ago.
Category: Tax
Expert:  Barbara replied 1 year ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Based on the information you have provided, your best options are forming an LLC (sole member) and use the sole proprietorship tax status. You will then use Schedule C of your personal tax return (1040) to report your income and expenses.

OR

Forming an LLC and electing S corporation status. The S corporation will file its own tax return (Form 1120S), and issue a Schedule K-1 to the shareholder (you). The information from Schedule K-1 will be entered on your personal tax return (1040). An S corporation is a pass-through entity so any profit/loss gets passed through to the shareholder.

A C corporation is the least advantageous because of double taxation--the C corporation pays taxes and you pay taxes.

The following link contains an easy reference regardingthe pros and cons of each:

http://fitsmallbusiness.com/llc-vs-s-corp-vs-c-corp/

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Expert:  Barbara replied 1 year ago.

Just following up with you to see if you have any other questions or concerns. If so, please let me know so I can further assist you.

Best regards,

Barb