Business Owners: Should You Be an S Corporation or Stay a Sole Proprietor?
If you are self-employed or own a successful small business, you may eventually ask: Am I structured the right way for taxes and long-term planning? Many businesses begin as sole proprietorships because the structure is simple and inexpensive. As revenue and profits increase, however, electing to be taxed as an S corporation may offer advantages—including potential payroll-tax savings and additional planning opportunities. The right answer depends on more than your annual income....