{"slug":"llc-vs-s-corp","title":"LLC vs S-Corp","url":"https://www.aversusb.net/compare/llc-vs-s-corp","faqCount":5,"faqs":[{"question":"At what income level should I convert my LLC to an S-Corp?","answer":"Most accountants recommend converting when your business generates $60,000-80,000 in annual net profit. At this threshold, S-Corp tax savings ($3,000-5,000 annually) typically exceed the additional compliance costs ($2,500-3,500). Use a tax calculator to confirm based on your specific situation and state."},{"question":"Do I need an accountant for an LLC vs S-Corp?","answer":"For an LLC, you can often file taxes yourself using software like TurboTax Self-Employed (cost: $120-200). For an S-Corp, a professional accountant or bookkeeper is essential ($2,500-5,000 annually) to manage payroll, quarterly filings, and ensure IRS compliance on Form 1120-S."},{"question":"Can I lose personal liability protection with either structure?","answer":"Yes, both LLCs and S-Corps lose liability protection if you commingle personal and business funds, fail to maintain proper documentation, or commit fraud. The liability protection level is identical for both—the key difference is tax treatment, not legal protection."},{"question":"What is the 'reasonable salary' requirement for S-Corps?","answer":"The IRS requires S-Corp owners to pay themselves a 'reasonable salary' for work performed before taking distributions. This prevents pure tax avoidance. For example, a consultant earning $100,000 might pay themselves a $65,000 salary and take $35,000 in distributions. The IRS audits businesses that appear to undercompensate owners relative to industry standards."},{"question":"Can I have a single-member S-Corp?","answer":"Yes, you can elect S-Corp tax treatment as a solo proprietor, but it's rarely worthwhile due to added complexity. Most tax professionals recommend single-owner businesses stay as LLCs unless profits exceed $100,000+ annually, at which point the tax savings justify the compliance burden."}],"faqPageSchema":{"@context":"https://schema.org","@type":"FAQPage","@id":"https://www.aversusb.net/compare/llc-vs-s-corp#faq","url":"https://www.aversusb.net/compare/llc-vs-s-corp","inLanguage":"en-US","name":"LLC vs S-Corp — FAQ","description":"Frequently asked questions about LLC vs S-Corp","dateModified":"2026-06-20T06:04:37.527Z","author":{"@type":"Organization","@id":"https://www.aversusb.net/#organization","name":"A Versus B"},"publisher":{"@type":"Organization","@id":"https://www.aversusb.net/#organization","name":"A Versus B"},"isPartOf":{"@type":"Article","@id":"https://www.aversusb.net/compare/llc-vs-s-corp#article"},"license":"https://creativecommons.org/licenses/by/4.0/","speakable":{"@type":"SpeakableSpecification","cssSelector":["#faq",".faq-item"]},"mainEntity":[{"@type":"Question","name":"At what income level should I convert my LLC to an S-Corp?","acceptedAnswer":{"@type":"Answer","text":"Most accountants recommend converting when your business generates $60,000-80,000 in annual net profit. At this threshold, S-Corp tax savings ($3,000-5,000 annually) typically exceed the additional compliance costs ($2,500-3,500). Use a tax calculator to confirm based on your specific situation and state.","inLanguage":"en-US","url":"https://www.aversusb.net/compare/llc-vs-s-corp"}},{"@type":"Question","name":"Do I need an accountant for an LLC vs S-Corp?","acceptedAnswer":{"@type":"Answer","text":"For an LLC, you can often file taxes yourself using software like TurboTax Self-Employed (cost: $120-200). For an S-Corp, a professional accountant or bookkeeper is essential ($2,500-5,000 annually) to manage payroll, quarterly filings, and ensure IRS compliance on Form 1120-S.","inLanguage":"en-US","url":"https://www.aversusb.net/compare/llc-vs-s-corp"}},{"@type":"Question","name":"Can I lose personal liability protection with either structure?","acceptedAnswer":{"@type":"Answer","text":"Yes, both LLCs and S-Corps lose liability protection if you commingle personal and business funds, fail to maintain proper documentation, or commit fraud. The liability protection level is identical for both—the key difference is tax treatment, not legal protection.","inLanguage":"en-US","url":"https://www.aversusb.net/compare/llc-vs-s-corp"}},{"@type":"Question","name":"What is the 'reasonable salary' requirement for S-Corps?","acceptedAnswer":{"@type":"Answer","text":"The IRS requires S-Corp owners to pay themselves a 'reasonable salary' for work performed before taking distributions. This prevents pure tax avoidance. For example, a consultant earning $100,000 might pay themselves a $65,000 salary and take $35,000 in distributions. The IRS audits businesses that appear to undercompensate owners relative to industry standards.","inLanguage":"en-US","url":"https://www.aversusb.net/compare/llc-vs-s-corp"}},{"@type":"Question","name":"Can I have a single-member S-Corp?","acceptedAnswer":{"@type":"Answer","text":"Yes, you can elect S-Corp tax treatment as a solo proprietor, but it's rarely worthwhile due to added complexity. Most tax professionals recommend single-owner businesses stay as LLCs unless profits exceed $100,000+ annually, at which point the tax savings justify the compliance burden.","inLanguage":"en-US","url":"https://www.aversusb.net/compare/llc-vs-s-corp"}}]}}