Book Launch Podcast of Making the Miles Count
I’m excited to announce and discuss the release of my newest book, “Making the Miles Count”, a guide to living beyond the daily grind and waking up each morning with purpose and focus.
I give you the background and the details on this new, unique book, that has personal stories, details from my life journey, and a outline of how I believe it can help you form new habits through the 21 day format of reading, reflection, and challenges.
Also covered in this episode, small business matters: So you are a solopreneur wanting to take the next step? A legal business entity is key. Should you go for a LLC or a S Corp? I discuss both and give my suggestions.
LLC or S Corp? It’s a question a lot of small businesses ask.
Limited Liability Companies (LLCs) and S Corporations (S Corps) are the two most common way to structure small and medium businesses in the US. Whenever an entrepreneur wants to up their game and reduce their risk, these are the first options that come to mind. What’s the difference and what is the best option for you? Let’s cover the details and help you discern!
Ready to dive in and learn more about LLC’s and S Corp’s?
Book Launch Podcast of Making the Miles Count
As noted, Limited Liability Companies (LLCs) and S Corporations (S Corps) are the two most common way to structure small and medium businesses in the US. Whenever an entrepreneur wants to up their game and reduce their risk, these are the first options that come to mind.
These two business structures are excellent at protecting business owners from creditors. When your business is an LLC or an S Corp, you are not financially responsible for more than your investment.
An LLC or S Corp shields owners from double taxation. Unlike C Corps that pay both corporate and personal taxes, LLCs and S Corps are “pass-through” entities and owners only pay taxes on their personal income.
Finally, both LLCs and S Corps deduct pre-tax expenses such as travel, computers, uniforms, phone bills, advertising, car expenses, promotions, and health care expenses to name a few.
These are just some of the reasons that make LLCs and S Corps better choices for new businesses.
Which one, LLC or S Corp?
So, you’ve narrowed down to the two. Now, you need to pick the structure that suits your business model. To arrive at the best decision, weigh the pros and cons of each option.
LLC Pros and Cons
- The owner of the business isn’t required to file a tax return on the LLC because they file personal taxes.
- LLCs are the easier of the two to set up. For single-member LLCs, you only need to fill a one-page form.
- LLCs are also the less expensive of the two to set up, just a few hundred dollars.
- Compared to S Corps, LLCs are simpler. This can save on the lawyers, accountants, and other professionals needed to run an S Corp.
- Owners of LLCs must separate the business from their personal affairs. You must not pierce the corporate wall.
- LLC owners are required to pay a quarterly self-employment tax on income generated from the business.
S Corp Pros and Cons
- S Corps can sell stock which can be traded freely, provided IRS guidelines are observed. LLCs, meanwhile, can only sell interest in the company.
- S Corps can have tax benefits as you pay reduced self-employment tax because you’re allowed to pay a reasonable, tax-deductible, salary to owners.
- Owing to their rigid management structure and extensive reporting requirements, S Corps have a greater appeal to investors
- The strict administrative guidelines that govern S Corps can feel like a burden for prospective business owners.
- Failure to abide by these guidelines could result in the corporation getting C Corp treatment from the IRS; an even worse position.
- Passive income is limited. Owners can’t have more than 25% of gross receipts from passive income.
Pro Tip: Enjoy the Best of Both Worlds; Be an LLC Taxed as an S Corp
If after this info you determine that your business would be best off as a pure LLC or S Corp. Go ahead and file the necessary forms.
Alternatively, you can choose to be an LLC, taxed an S Corp. This way you get to enjoy the administrative advantages of LLCs such as fewer forms, fewer formal meetings, and minimal record keeping requirements, as well as S Corp tax advantages, including paying salaries and wages to yourself and other owners.
To have your LLC treated as an S Corp for the entire calendar year, simply file Form 2553 by March 15.
- My complete guide to Digital Marketing in 2018 including Facebook and social media lead generation online… Game Plan Book >>
- Getting your Business Setup and Running Well on Instagram > New Ebook Resource
- Making the Miles Count – 21 Day Guide to living beyond the daily grind!
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Why the Halftime theme Mike?
I’m an Indiana Hoosier native where basketball is the top sport. Every team heads to the locker room at halftime to evaluate the first half and create an updated plan for the second half. That plan includes adjustments based on reviewing what worked and what didn’t. The “halftime” is a key review point where the game stops, the team pulls away to huddle in the locker room away from the fans, and they come out prepared and ready to succeed in the second half.
That’s what this podcast is all about, taking the time to pull away for a bit to evaluate, learn, and set some strategies for your business to succeed in the second half. Join me by subscribing and let me be your “business halftime” to help you find great success going forward!