Which Is Better in Texas: an LLC or an S-Corp?


Quick Answer

An LLC structure can be taxed as an S-Corp which would be most advantageous for the business. The main advantage of an S-Corp is reducing the self-employed tax burden. LLC structures can elect to be taxed as an S-Corp while still having limited liability.

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Full Answer

A majority of businesses choose to be an LLC as it protects the individual owner's personal assets if the business becomes insolvent. The downside to an LLC filing taxes as an S-Corp is in regards to the filing of W-2 employees. LLC businesses must withhold taxes for each W-2 employee and file tax reports on a quarterly and annual basis.

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