How to Choose the Right Business Structure (LLC, S-Corp, etc.)

Jose’s Tax Service | Trusted. Transparent. Tax-Smart.

Starting a new business? One of the most important decisions you’ll make is how to structure it legally. Sole proprietorship, LLC, S-Corp, partnership — your choice will impact how much you pay in taxes, your legal liability, and how your business operates day-to-day.
At Jose’s Tax Service, we help entrepreneurs make smart, informed decisions that support both growth and compliance.

Why Your Business Structure Matters:

Choosing the right entity affects:
✅ How you’re taxed
✅ Your personal liability
✅ How you pay yourself
✅ Your ability to raise capital
✅ Ongoing paperwork and compliance
And once your business starts growing, the wrong structure can cost you thousands in taxes and legal exposure.

The Most Common Business Structures:

1. Sole Proprietorship

– Easiest and cheapest to start
– No separation between personal and business liability
– Self-employment taxes apply to all profit
Best for: Low-risk, single-owner startups or freelancers

2. Limited Liability Company (LLC)

– Flexible, low-maintenance structure
– Limits your personal liability
– Default tax: self-employment (Schedule C), but can elect S-Corp
Best for: Small business owners wanting legal protection with flexibility

3. S-Corporation (S-Corp)

– Allows owners to split income between salary and profit
– Potential for huge tax savings on self-employment taxes
– More IRS scrutiny and requires payroll setup
Best for: Profitable businesses with predictable income and growth

4. C-Corporation (C-Corp)

– Separate legal entity
– Profits taxed at corporate level (double taxation risk)
– Great for venture capital and reinvesting profits
Best for: Startups planning to raise capital or scale large

Which Is Right for You?

There’s no one-size-fits-all answer — but here are some key questions:
– Do you want to protect your personal assets?
– Will you have partners or investors?
– Do you plan to reinvest profits or pay yourself a salary?
– Are you trying to minimize self-employment tax?
– Will you operate in multiple states?

💡 Pro Tip: Many small business owners start as an LLC and later elect to be taxed as an S-Corp once income grows.

How Jose’s Tax Service Can Help

We guide you through:
✅ Choosing the best structure for your goals
✅ Registering with the state and IRS
✅ Setting up EINs, licenses, and compliance
✅ Filing S-Corp elections (Form 2553) if needed
✅ Year-round tax planning based on your entity

Real Results, Real Clients

“Jose’s Tax Service helped me go from sole proprietor to S-Corp, and I saved over $4,000 in self-employment taxes last year alone!”
— A. Reed, Salon Owner, CT

Don’t Guess — Get the Right Foundation from the Start

📞 Call us at 475-254-9373
📍 Serving Connecticut and all 50 states virtually
🌐 Book your new business consultation at Josestaxservice.com