What type of business entity should I form? Are there any resources that put this in plain English?
by 
Sigma6
ANSWERS: 1
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Here is the deal: The more your business income/profit is, the more you would want to look at S-Corp or LLC. It is the tax advantage really. That is where the savings comes in. Sole-proprietorships are the simplest and, in my opinion, the best way to go until you start reaching $100,000 plus a year or thereabouts. The problem on a sole proprietorship (self-employed) is that you as your own employer have to match your social security. This is on all the profits...your pay. As an S-Corp or LLC, the profits don't have to be matched with social security taxes. This is a rough way to say it. One thing to know (from personal experience, big company to broke) is that things get complex if one does a partnership or corporation. Now-a-days, a corporation may not be the shield of lawsuits it once was. Incorporating takes away some risks, but you pay. If there ever is a lawsuit, then you'll pay more.... So it is a judgement call, probably based on how much is at stake.
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