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RE: Sole Proprietor or LLC

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For me, the question was not liability, but money.


As a sole proprietor I had to pay SECA tax on all my income.  When I incorporated and filed as S Corp I paid myself a reasonable salary and everything on top of that was given to me as Distributions.  Distributions are taxed at my personal federal income tax rate, but no Social Security or Medicare tax is paid on distributions.  The first year I was incorporated I saved over $5k of potential SECA taxes.  There is some extra paperwork and filing, but the money I didn’t send to DC made it all worth it.


I don’t know the extra hassles of corporation taxes in California.  Like Stan, I live in a No Income Tax state of Texas.  My income is small enough that the Texas franchise tax on business is zero and since I don’t lay myself off, the extra employer’s unemployment tax has always been low.





From: Joe Venuti [mailto:jovenengr(--nospam--at)]
Sent: Wednesday, March 03, 2010 12:21 PM
To: seaint(--nospam--at)
Subject: Sole Proprietor or LLC


Hello All


A non technical question………from your own personal perspective and experience; what are the Pros and Cons Sole Proprietor or LLC ?




Joe Venuti,  P.E.

Joven Engineering

La Quinta,  CA



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