What is the difference between an S-Corporation and an LLC?

What is the difference between an S-Corporation and an LLC?

 Both Limited Liability companies (LLC) and S Corporations sidestep the double taxation burden that exists in a C Corporation. Shareholders within each are provided with personal protection from any liabilities their corporation is faced with. Within a LLC, individuals are subject to self-employment tax while the profits of an S Corporation can only be taxed if the portion is classified as “reasonable salary.” When it comes to losses, both S Corporations and LLC losses are subtracted from the tax returns of members and/or shareholders. The loses and gains of an S Corporation are evenly split in relation to the shares of each shareholder while LLC’s provide more flexibility in terms of the divide between profits and gains.

Create an S-Corporation