LLC vs. S-Corp: What Creative Professionals Need to Know
If you’re a freelancer or creative business owner, you’ve probably asked yourself: “Should I be an LLC? An S-Corp? Does it even matter?”
The short answer: yes, it matters. But maybe not in the way you think.
LLC (Limited Liability Company)
LLC protects your personal assets if something goes wrong in the business.
Keeps things simple: less paperwork, flexible structure.
Tax-wise, it’s still “pass-through” income (you pay self-employment taxes on everything).
S-Corp (S-Corporation election)
Not a different company type! It’s a tax filing status you can elect as an LLC (or a corporation).
Lets you split your income between salary (subject to payroll taxes) and distributions (not subject to self-employment tax).
More admin work: payroll, filings, bookkeeping.
Rule of thumb
If your business nets under ~$60K, sticking with an LLC is usually fine. Above that, an S-Corp might save you money but only if you and your accountant can handle the extra complexity.
The big takeaway
LLC = liability protection.
S-Corp = tax strategy.
You don’t have to figure this out alone. But the sooner you get it right, the more confident you’ll feel running your business. And always consult your CPA or tax professional!
👉 This is one of the 10 challenges I tackle with clients in the FAR Financial Clarity System™.
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