Is there a better tax break with a LLC business versus Corporation?
Posted on September 28, 2008 by admin
Ms A asked:
I plan on opening a business and not sure what to file under. I was told that certain corporation get tax breaks, if so which ones and how?
I plan on opening a business and not sure what to file under. I was told that certain corporation get tax breaks, if so which ones and how?
LLC is a corporation-like entity.
If you pay taxes in the US I think you are referring to a “sub chapter S corporation”. This entity has the full legal isolation of the corporate form but is taxed as a partnership. That is that the income and loss is not taxed directly but is combined with your personal income and taxed at that level.
There are a few limitations like 25 or less shareholders and only one class of stock. Additionally you must be active in the corporation for this to apply.