Should I form an LLC or an S-corp?

By Ask a Shop OwnerUpdated Finance

Short answer

LLC the day you start. S-corp election once net profit is consistently over $50K. Both done with a CPA, not a $99 web form.

Why LLC first

Liability protection from day one. Cheap to form. Doesn't change your taxes. The single biggest mistake is operating as a sole proprietor, where a lawsuit can take your house.

Why S-corp later

Once profit is steady, S-corp election can save thousands a year in self-employment tax. But it adds payroll and complexity. A CPA does this math for you in 30 minutes.

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