I am currently doing business on eBay selling small electronic items. I buy in bulk and sell retail. I am thinking of registering for a company and get a sales tax ID.
Which one do you think is better, LLC or S-Corp?
Currently I do all things by myself and profit is about $3K/mo.
I know that from tax perspective S-Corp is more beneficial, but LLC is less paperwork thus less complicated. Based on this alone, I am leaning towards LLC since it will be less stress and I will have more time to grow the business. Please let me know what you think.
Thank you for your help!
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Show me another »Small business eBay. LLC or S-Corp, which one is better?
Best Answer - Chosen by Asker
If you realize that your business will be able to deduct professional service fees from your taxes, why not hire an attorney and/or accountant that can help you maximize your profits based on your type of business? Unless you are afraid of a lawsuit selling electronic items, a sole proprietorship is your best starting point until the business grows. Your accountant can also help you make some of your profit into a tax shelter with home business credits, SEP or 401K plan, and other write-offs that will save you from raising your tax bracket into the next level.
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Other Answers (3)
- An LLC is the legal structure. The next part is the tax structure. By default, a single member LLC owner files as if they are a sole proprietor and pays social security and medicare tax on their net profit - about 14%, in addition to your regular tax bracket. But you have a choice. You can choose to file as a regular corp or elect to file as an s corp. You should file the LLC as an s corp.
An LLC is not less paperwork and is not less complicated.
You should get the book "Winning in Biz" - it's perfect for start up businesses and explains this stuff pretty well. You should go see a local CPA for advice.Source(s):
- Ebay.. the name spell success. It is a big business having multi billions dollars of tranaction happening in a year. There are countless person having a earning of 6 figure income. And of course many others having a regular income varying netween $500-$5000 per month. There are many persons, who has taken up this as a career but dropped it because they did not feel as an opportunity due to some or the other reason. There are certain guidelines which need to be followed to be successful in ebay like other business demands.For details visit
http://ebaysimplified.blogspot.com - I would go for the LLC,
If your intrested to increase you 3K to 10K you must check out Salehoo, http://salehoo.deals-guide.com/
Good Luck Friend
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