Choosing the right business structure is a crucial decision for entrepreneurs, as it can significantly impact their tax obligations and potential savings. Two popular options for small businesses are the S-Corporation (S-Corp) and the Limited Liability Company (LLC). Each offers distinct advantages and disadvantages, and the tax benefits of each structure can vary depending on your business’s financial situation and future goals. As we approach year-end, understanding the key differences between these two structures and their respective tax benefits is vital for making informed decisions that could save your business money and ensure compliance.
This article explores the key distinctions between an S-Corp and an LLC from a tax perspective, offering insights into which structure may provide more advantages as you approach the year-end tax planning phase.