Business Entity Comparison
Compare Sole Proprietorship, LLC, S-Corp, and C-Corp structures side by side. See estimated taxes, liability protection, and complexity for each entity type based on your expected income.
Entity Comparison
Sole Prop
Self-Employment Tax
$16,955
Income Tax
$16,288
Total Tax
$33,243
Liability Protection
None
Complexity
Very Easy
Simplest structure. No separation between personal and business assets.
LLC
Self-Employment Tax
$16,955
Income Tax
$16,288
Total Tax
$33,243
Liability Protection
Full
Complexity
Easy
Same tax treatment as Sole Prop but with personal asset protection.
S-Corp
Self-Employment Tax
$11,016
Income Tax
$18,243
Total Tax
$29,259
Liability Protection
Full
Complexity
Moderate
Salary of $72,000 + $48,000 in distributions to reduce SE tax.
C-Corp
Self-Employment Tax
$0
Income Tax
$39,420
Total Tax
$39,420
Liability Protection
Full
Complexity
Complex
Subject to double taxation. Best for raising outside investment or retaining profits.
Recommended: S-Corporation
An S-Corp could save you approximately $3,985/year in self-employment taxes compared to a Sole Proprietorship by splitting income between salary and distributions.