Should I form an LLC taxed as S-Corp or an S-Corp for affiliate sales? (10)

I want to setup my business entity so I can get paid by Mobipium (need my tax ID to get paid). My CPA is on vacation for two weeks, so thought I would just go ahead and start up a company on incfile.com. The question is LLC taxed as S-Corp (until I have some sales history) or just do the S-Corp. Anyone care to comment? ***Of course, I understand you will not be giving me any legal advice.***

In general LLC's are a good legal framework. A very nice setup is an LLC-partnership. This reduces your risk of getting sued vs being the sole owner of a company because its harder to garnish your company's earnings/holdings if shit hits the fan. You can always do something like you owning 97% and have a 3%minority partner with 0 voting rights... so you are the 'real owner' but techinically just a partner. Or you can do something like 50/50 or 33/33/33 split if you have more active partner. Either way, a LLC partnership is a good legal setup, provided that costs are not very high in your state. Accounting costs are higher this way vs being a sole owner but if you are already doing 6 figures, then it shouldn't matter much.

From my understanding, affiliate marketing is fairly flexible with what type of setup you have. I talked to my CPA about this...it seems there are minor pro's and con's with going S-corp vs pass-through taxation. I havn't tried S-corp to be honest. His point of view is that its mostly an accounting difference rather than anything else. What are your reasons for choosing S-corp if I might ask?

Less than 30 days of sales and already at 6 figures? Jesus.

Probably what jack01 said

I have an LLC with EIN and all that, but honestly don't use it unless necessary. Even if you get paid using your personal info or your SSN (I think you only need if it's a network based in the US... or avoiding double taxation on EU/VAT networks), you can always sort it out later as you'll be self-reporting when you file. A good CPA will figure it out for you and dot the i's and cross t's.

I have heard from big dogs in the space that an S-corp has really good advantages (tax rate %) if you're earning 6 figures or more. Definitely worth looking into a good CPA who is familiar with IM/AM space.

I'm using a LLC (local variation in my country) too for aff.marketing.

I found these articles helpful, but not conclusive on finance for affiliate marketers.
https://founderscpa.com/taxes-affiliate-marketers-work/
https://charlesngo.com/affiliatefinances/
https://www.forbes.com/sites/forbesn.../#2f4642086f64

jack01 thread has THE most in-depth info on LLC info I have read anywhere. Thanks man.

What are your reasons for choosing S-corp if I might ask? Save on taxes.

Originally Posted by jack01

In general LLC's are a good legal framework. A very nice setup is an LLC-partnership. This reduces your risk of getting sued vs being the sole owner of a company because its harder to garnish your company's earnings/holdings if shit hits the fan. You can always do something like you owning 97% and have a 3%minority partner with 0 voting rights... so you are the 'real owner' but techinically just a partner. Or you can do something like 50/50 or 33/33/33 split if you have more active partner. Either way, a LLC partnership is a good legal setup, provided that costs are not very high in your state. Accounting costs are higher this way vs being a sole owner but if you are already doing 6 figures, then it shouldn't matter much.

From my understanding, affiliate marketing is fairly flexible with what type of setup you have. I talked to my CPA about this...it seems there are minor pro's and con's with going S-corp vs pass-through taxation. I havn't tried S-corp to be honest. His point of view is that its mostly an accounting difference rather than anything else. What are your reasons for choosing S-corp if I might ask?

Just reading up on it a bit, with the recent tax changes... no more line item stuff like travel and gas. But, there is a pass through exemption (S Corp/LLC) and the 20% flat c-Corp more than makes up for those. Especially if you actually have big income, as those line items (travel, gas) were single digit percentages at best.

I'm not successful enough to know better though

From Flor at Mobipium.




Amy

OMG- What a weight you have taken off-my-shoulders Amy. I did wonder why I had to give a "Company Name" and "Tax ID" to sign up. Then I received a copy of the invoice I am to submit requesting only "Name & Address". Thanks Amy for looking out for your students.

S-corp election for your LLC primarily saves on self-employment taxes. IIRC, it's significant ... somewhere between 15-20% savings according to my cpa. She recommended taking the election for me. Also this: https://www.upcounsel.com/self-emplo...-llc-vs-s-corp. Plus you still get all the same benefits of liability protection.