I’ve bounced between full time and freelance my whole career of about 2 decades now, but never leveled up to becoming a 1099 independent business. I’m ready to do that now and have heard S-corp is the way to go here in NYC, vs. LLC.
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As long as you have your own clients or at least on agencies list as an IC or vendor? This matters more than taxes & filing.
-Check out the Mt. Freelance course (mtfreelance.com)
-Find a good CPA who deals with freelancers (LLC is the business entity / the way you’ll form your business, S-Corp is the tax election)
-Hiscox or Thimble for insurance
What are the main advantages of becoming an S-Corp rather than an LLC?
So you become an LLC first, S-Corp is the tax election you make. The big advantage is doing this can save thousands in taxes each year. Say you make $100k/yr through your business. If you are an LLC w/o S-Corp election, you pay 15% self-employment FICA tax on that entire amount. If you setup as an S-Corp, your accountant will put you on salary for a certain amount - say 50k, still be subject to that tax. But anything above that is taxed as a distribution, not subject to self employment FICA tax. It does come with some added complexity like having to setup payroll for yourself. Would very much suggest finding an accountant who specializes in freelancers who can run the numbers for your specific business. I think mine said around 80k was the threshold where it makes sense.