Sole Proprietor vs. LLC vs. S Corporation vs. C Corporation | Legal & Tax Differences
HTML-код
- Опубликовано: 24 мар 2020
- This video discusses the Sole Proprietorship, LLC, Corporation (including S Corporations) both from a Legal and Tax perspective. I also discuss what a Professional Limited Liability Company is as well as the difference between a Single Member LLC and a Multi Member LLC.
If you're ready to form your business, I've partnered with the following companies. Use the links below as some of them include coupon codes to receive up to $100 off their services:
Inc Authority: bit.ly/incauthoritycoupon
IncFile: bit.ly/incfilecoupon
Zenbusiness: bit.ly/zenbusinesscoupon
Northwest Registered Agent: bit.ly/northwestregisteredagen...
BetterLegal: bit.ly/betterlegalcoupon
Note: The due dates for when to file the various tax documents have recently changed...they are as follows:
Sole Proprietorship: April 15th
S Corporation: March 15th
Partnership: March 15th
C Corporation: April 15th
I created this video because there is a lot of misinformation out there on RUclips and other various channels and it’s crucial you do this correctly when you start a business.
Take what you learn from this video and ask your legal or tax professional all of your specific questions. If you want to contact me, my information is below.
If you learned something from this video, please like and subscribe and follow me on my various social media handles below. If you would like to contact me with a specific question, please visit my website or leave me a comment.
Website: www.navimarajcpa.com
Email: navi@navimarajcpa.com
Phone: (561) 318-0232
Instagram: / navimarajcpa
LinkedIn: / navi-maraj-cpa-78b9b250
Twitter: / navimarajcpa
Facebook: / navi-maraj-cpa-pllc-10...
This video was created for informational purposes and it is not to be construed as legal and tax advice specific to your unique situation.
© Navi Maraj CPA PLLC. All rights reserved.
You can file your LLC or Corporation for FREE using the links below! If you use the links, you can receive up to $100 off any additional services you may want to add:
Inc Authority: bit.ly/incauthoritycoupon
IncFile: bit.ly/incfilecoupon
Zenbusiness: bit.ly/zenbusinesscoupon
Northwest Registered Agent: bit.ly/northwestregisteredagen...
BetterLegal: bit.ly/betterlegalcoupon
Also, the due dates for when to file the various tax documents have recently changed and I misspoke in this video. The correct due dates are as follows:
Sole Proprietorship: April 15th
S Corporation: March 15th
Partnership: March 15th
C Corporation: April 15th
Thank you
How can i get a code $100 off for LLC?
If I am building a business to sell it. What’s the best approach to save on taxes at the final sale of the company.
I work at a law firm that specializes in asset protection and business structuring, and you were spot on I am glad you used the different colors for the electives taxation and what is default for new business owners this is hard for people to understand. Thank you for taking the time to do this explanation video.
Hi Karen. Thanks so much for the feedback. You’re absolutely right, very hard concept for new business owners to understand.
Man you are an incredible Teacher. Easy to understand and follow. You explain this stuff really well, and even the way you use your hand as brackets to discus a particular structure is super cool. I'm trying to start my enterprises up and spent hours finding the right corporation to file and this was the vid that made it all click for me. Thanks a TON man. So humble and grateful right now.
Thanks so much for the feedback Bronson! Best of luck to you with your new venture.
Thank you SOOO much for this video!! This is super helpful. I am starting a business with a partner that lives in another state and wanted to make sure we set everything up correctly. I have spent hours researching this and this video was THE MOST HELPFUL in breaking down the different types of entities and where to start out. I feel like I finally have some clarification. Thank you again!
Great Video Navi, super informative and I appreciate you mentioning that most people make the switch at about $40k to opt into being taxed like an S-Corp. Super helpful!!
Thank you. I've got other videos in my library breaking down the reason why $40k makes sense. Here is a link to that video if you want to check it out: ruclips.net/video/QFYFGfHOuwI/видео.html.
Love the visual and your verbal explanation. It's so true that there is so much bad info out there. I cringe when I hear someone say their company is S-Corp because that's not a business entity and rather a tax structure. Thank you for putting this video together and sharing with the masses! Saving it and will be sharing it with others.
Thanks Joana...appreciate the feedback!
Thank you for the visuals! It's so nice to have an idea of all of the options to narrow down what works best for each small biz owner.
Hey Navi! Thanks for posting this video. I've seen so many of people making these videos and they are so convoluted and hard to follow. My one recommendation is for you to state where you work- a lot of people may want to hire you but if they don't realize you're local or certified in their state, they may not even bother going to your website.
Thank you for taking the time to educate us.
All the best!
Tom
Brooklyn, NY
-NYC Video Podcast
Thanks for watching and for the feedback! I appreciate it.
This was a great video, straight to the point. Makes me a little more secure about getting my llc started thank you.
Thanks for the feedback Alejandra! Glad it was helpful. Don’t forget to check the links in the description to form your LLC for free if you’re ready.
This was the single best explainer video of the different Corp types I needed to learn about. Thank you!
Excellent video! Short, to the point, with easy to understand illustration. Thank you!
Thank you so much! I have been trying to decide how to structure my business for a very long time. You helped me finally make the decision.
You’re welcome! Glad you found the video helpful.
I've been researching information all day. your video was straightforward and very helpful. Thank you.
You’re welcome Whitney…glad it was helpful!
I cannot overstate how helpful this video was. Thank you!
Thanks so much Sheena! Really appreciate the feedback.
Super helpful, Navi. Thank you. Such a great, concise explanation that I haven't found anywhere else!
This is excellent - coming from a tax attorney / CPA! Looking back through your videos to see how you got into doing this!
Thank you! Your videos are most informative and very easy to listen to. The best!
Thank you for the feedback John - means a lot!
Just subscribed to your channel. That was an awesome vid. Simple, and straight to the point! Thanks
Thanks for watching and subscribing Edgar! Glad you learned and found it helpful.
Thank you so much this video was exactly what I needed!!!
Thanks Cru - glad you found it helpful. Please share with others if you think it will help.
Excellent video! Thanks for sharing! I have shared with others studying for the CPA.
Thank you so much for not having an accent, this was extremely pleasant to watch.
Thank you! it was so hard to find this information. You got right to the point
Very helpful man! Thanks! Even wrote down all these notes since I am going to have to start doing taxes for my business and side business. Once again thank you very much for this!
Thanks for the feedback. You're not the only one who has told me they take notes while watching!
Thank you. A team discussing with me my Financial Reporting course.
Amazing information. Easy to follow and understand. Great presentation.
Thanks for the feedback @Bd Manus!
Thanks for the easy explanation. Subscribed ! 👍
Navi I appreciate you for making this video! I feel like I have a much better understanding now.
That’s great to hear Neal! Thanks for watching!
Sir, you explain in a way that an average person like me can understand. Thank you.😇😇😇
Thank you so much for this valuable information! Be blessed!
Short and to the point - much appreciated!
Thanks Rinaldo!
I appreciate you mention the SM LLC, no others yet have.
I didn’t even know about PLLC.. this video was so helpful and necessary
Really good video. Cleared some things up in my head since I am a noob.
Thank you, good Sir!
Wonderful video and please make more!
Thank you baba black for the feedback!
Thanks. I've been meaning to change to S-Corp from C-corp
You’re welcome Ben. Consult with your tax professional to make sure it is the correct thing to do based on your specific situation.
Thank you, awesome explanation!
Very well put together. Thank you.
You’re welcome…let me know if there is anything else you need help understanding.
Thank you so much, I'm currently researching the best option for a brand new small business.
Great - glad the videos are helpful!
Thank you so much for making this video. It is very helpful.
You’re welcome Kushagra!
SO helpful and very effective at explaining. Thank you!
Thank you for the feedback Lesly...glad you found it helpful!
Amazing explanation! thank you so much!
You're welcome Joseph! Glad you found it helpful!
Excellent diagram and explanation. I haven't seen anything explained this well. These RUclips attorneys just throw out terms like "schedule c" and "1065" like your supposed to know without ever explaining what's what.
@Braden Souder Thank you for the feedback! Glad that you found it helpful and informative.
Thank you for this breakdown.
Thank you.You are a great teacher.
Nice content. I found this very helpful.
Thank you so much! This clarified so much for me!
You’re welcome…glad you found it helpful!
Thank you for simplifying this
Hi Angela - you're welcome! Not sure why it isn't explained like this more often.
Very useful video! I'll recommend it to my colleagues
Thanks for the feedback Anastasiya. Hope your colleagues find it helpful as well.
You are so clear thank you so much. You got a new subscriber 😊🤓👍🏾
Appreciate the feedback Cocoa...thanks for subscribing!
Thank you Navi. Grateful.
Thanks Navi! Very helpful information
Easy to follow, well done.
Mr Navi this was great information as a novice beginner
Thank you. That was very helpful.
You’re welcome Sean! Glad you found it helpful!
Keep up the videos boss, the community needs more information from qualified individuals!
Will do!
Thanks for the great overview!
You’re welcome Dennis! Thanks for watching.
Great video as always, Navi! You explain things so much better than others. Do you do tax filings for small business owners or just consults? I’d love to work with you!
Thank you @A Self Guru....my clients outsource all of their accounting and tax to me. What I mean by this is I help them with their bookkeeping, tax planning, payroll (if necessary), tax filings etc. In other words, although I do prepare tax returns, I only do it for businesses where I handle everything else for them as well.
@@NaviMarajCPA thanks for the information, Navi! My business is already setup as Florida LLC with S corp and payroll is also outsourced, so I just need help with tax preparation and filing. So sounds like you don’t handle just that? What would be the best way to get in touch with you?
Really Helpful.. Keep Up The Gud Work Bruh✅❤
Thank you - appreciate your feedback and support!
Navi one of the missed information that most all of us don't received is that we have to pay $ annually to our Estate if we decide to file and articles or be treated as S Corp if we want to save money on taxes.
Great information. Thank you !
Thanks Thandie!
Good information, thank you 🙏🏻
I just started my LLC. Thanks for the info.
You're welcome Daniel...best of luck to you and your new business!
@@NaviMarajCPA to
Daniel, why?
Thank you for sharing your knowledge.
You’re welcome! Thanks for watching.
Thank you Navi, you explained so clearly! I’m starting a new business about heavy equipment rentals ( mini excavators, skid steers) I’ll have a foreign partner that doesn’t have a SSN. What type of entity do you think will fit for us ? Thank you so much for this video!
You're welcome. I can't give specific advice here but just a general note that an S Corporation cannot have shareholders (owners) that are nonresident aliens. Hopefully that gives you some guidance on how to proceed.
Nice video, my friend. Thank you
Thank you so much for this information. My mom wants me to register her cleaning business and I’m learning all this new stuff. I’m going for LLC 😅
You're welcome!
Great content!!! My question is, does it apply in Canada?
Very helpful. Thank you!!
You're welcome Ang L! Glad you found it helpful.
I'm learning so much from your videos. I realize that we need to hire an accountant because our tax agent has not been advising us well enough.
However, when I hear "consult with your accountant or lawyer", I think that I'm just a small company (or planning to be) and I can't afford those professionals.
In other words, what options does the "small business owner" have who can't afford a lawyer or accountant?
your a legend, thank you for the info
Thanks for the useful video.
You’re welcome! Thanks for watching.
super helpful thank you!
Thank you Shijia! Glad you found it helpful.
Very informative!
Thanks I replayed this too many times
You’re welcome!
This video is a life saver
Thanks! I wish it was around when I was first learning about these concepts. 👍🏼
Thank you for the good info!
You're welcome @Johnny Sav. Thanks for watching and subscribing!
Very Informative!
Thanks for the feedback!
It's kinda important to mention WHERE you are and which jurisdictions oversee that!
Very informative vide, thank you for posting! I own a single-member LLC on the side and just filed it as an LLC mid this year. For the beginning half of this year, it was a sole proprietorship. For my upcoming tax return, do I need to file both a 1040 Schedule C for the first half of the year and the S Corp Form 1120S for the second half? I'd like to file my LLC taxes separately as I do not want to mix it in with income from my regular W2 day job.
Hi Kathy...thank you for the feedback. I don't think I have enough information to answer your question. I'm going to assume you formed an LLC on January 15, 2020 and then in July of the same year you made the S Corp election.
The answer to your question depends on how you completed the S Corp election paperwork. There are ways to make the S Corp election effective as of January 15, 2020 (the date your LLC was formed)...the average person (and even the average accountant) does not know how to do this.
If you were able to make the S Corp election effective as of January 15, 2020 then you would be filing an 1120S for the entire year.
Also, S Corporations are considered "pass through" entities so even though you'll file a separate tax return for it, the income from the S Corporation will still end up on your individual tax return to determine the amount of taxes you will pay.
Hope that makes sense but I know it is a little confusing. Get with an accountant now to make sure there are no surprises at the end of the year for you.
Thanks for the video! Question. If I set up an LLC initially (say Jan 1, 2022), do I have some time to determine if I'd want to be taxed as an S-Corp? If I start getting customers on Jan 1, I wonder, would I have some time to assess how well my business is doing in order to determine if I'd want to be taxed as an S-Corp? You elude to tax filing, which would be March 2023, is that deadline by when I have to decide? That would give me the entire year to see if I can make a profit of $40k+. Thanks!
Great video. My wife and I are nurses. We work as self employed 1099. I could open a single member LLC and do S election. And they both work in the same LLC as an S corp. And that the 1099s are reported from both of them through the S Corp. Then the S corp generates w2 for each one and the dividends pass through K1 to the owner. Or each would have to open their own LLC and make S election. thanks
Great material
Great Presentation!
Thank you @Vivi Zhou - hope you found it helpful.
Thank you so much!
This is very helpful Navi. And you are correct, there is some confusing info in RUclips land. You say that an MM LLC can file taxes as an S-Corporation. I've also heard that it can file as a C-Corporation. Is that accurate?
Hi Leva...thanks for the feedback! Yes, a MM LLC can also elect to be taxed as a C Corporation by filing Form 8832 with the IRS.
Awesome video, just one question-Where do Enterprise Incorporate fall in?
Not sure I understand your question.
sooo helpful thank you!!
You're welcome Squally! Glad you found it helpful!
This is the most helpful video about this topic. Thank you so much!
Thank you Angelica for the feedback! Glad you found it helpful.
really great video.
Thanks. So helpful
Hey, noticed you’re in Florida. I am a veteran trying to start a business in Florida. I’m 100 % disabled VA, and want to run the business out of my home. Can I do that and still use the tax credit for disabled vets? I have so many other business questions, I want to get this business going and I’m motivated to learn as much as I can before I plunge! Thank you for the information in this video, based on it I think I have an understanding of what choice I have to make soon.
Thanks for the info
Very helpful thank you
Love this break down on Business entities. A little confused here. I'm a realtor and have my single member LLC. Before my LLC generated close to $50,000 and now it's over 100K. Should I consider switching to C-Corp. ? Why or Why not?
In my opinion, if you're consistently going to making over $50k in profit (not revenue) then you should consider making the S Corp tax election for your single member LLC. I do not recommend C Corps for the overwhelming majority of small businesses. You can learn why in the the following videos:
1. What is an S Corp and is it right for your business: ruclips.net/video/jjGVLWPpviQ/видео.html
2. When does an S Corp make financial sense: ruclips.net/video/QFYFGfHOuwI/видео.html
Navi, the IRS says c corp tax returns are typically due 4/15. Would this be a recent change? You are amazing and this video is very informative thank you
Awesome video Navi! I recently started a print-on-demand shopify business. However, I haven't created an entity for it yet. I'm making less than 40k a year from the business. This is a side business for me as I have a separate full-time job. Would you suggest for me to create a SM LLC entity and to be taxed as a Sole Prop?
Hi Sualah! Thanks for the feedback. Tough to comment on without knowing more information though. Depends on what your concerns are...form the LLC for legal reasons, not for tax reasons if the side business will produce less than $40k in profit. You may need to watch some of my other videos for my response to make sense.
Great video! Wish I watched this video beforehand. I did not know about the deadlines for S-Corp and got hit with the late fee. Won't happen again...well not on purpose anyway LOL
Hi Doug G. Thanks for the feedback and for letting the community know about your experience. Hope others will learn by your willingness to share.
Navi, thanks for the video.
Can a sole proprietor file taxes as married filing jointly? or should it be married filing separately?
Hi Navi, I have a question. What if I accidentally filed for corporation (in California) rather than llc and didn't realize until they approved it, is there a way to change it? Would I be paying double tax for the year?
Great video, thank you very much. Could you please write a work about 5472 form. And maybe about SM LLC owned by None resident. Thanks again