Sole proprietor or LLC? When to elect S-Corp? What the 1099-K rules actually mean for you? These decisions happen once but affect your taxes for years. Get them right from the start.
The real differences in liability protection, taxes, costs, and credibility — and the income level where forming an LLC starts making financial sense.
The S-Corp election can save $5,000–$15,000/year in SE tax — at the right income level. Here's the math, the threshold, the reasonable salary rules, and the deadline you can't miss.
The threshold changed again. Here's exactly what triggers a 1099-K from PayPal, Venmo, Stripe, and other platforms — and what it means for your taxes.
Zero cost, zero paperwork, identical taxes. The only gap is liability protection — which matters less at this stage. Focus on building revenue first.
Liability protection and credibility with larger clients. Taxed identically to sole proprietor by default — no automatic tax savings, but the protection is worth the $50–$500 filing fee.
S-Corp election starts to make sense financially. Run the numbers with a CPA — savings of $5,000–$10,000/year are possible, offset by $1,500–$3,000 in added compliance costs.
S-Corp election almost certainly pays for itself at this level. Savings of $10,000–$20,000/year are typical. The administrative overhead is justified. Do this with a CPA.
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