Independent Consulting Summary

Here is a quick summary of things I learned setting up my own entity for IT consulting. This list is by no means complete. As usual, consult your own experts before making any decisions on your own.

Issue	LLC (taxed as S Corp)	S Corp	C Corp
least headaches especially if you don't care for accounting
your clients need to file a 1099, which may be risky for them
you have lots of legitimate business expenses that can shield you from SE tax
provides you with the "corporate veil" to shield your personal assets from liability
simplest entity to set up and disband
subject to "self-employment tax"	some of this can be "shielded" by paying a reasonable salary and taking the rest as distributions	some of this can be "shielded" by paying a reasonable salary and taking the rest as distributions	some of this can be "shielded" (but not as much as the other two options)
requires you to handle your own payroll and payroll taxes
subject to Estimated taxes	possibly not/can be handled via increased FIT withholding	possibly not/can be handled via increased FIT withholding	possibly not/can be handled via increased FIT withholding
gets you the most deductions for fringe benefits
requires its own tax return
Shields you from Personal Service Corporation designation
can deduct legitimate business expenses
can save the most SE tax on health ins premiums
life ins premiums are deductible			(maybe)
You can save SE and FIT by hiring your kids
SIMPLE IRAs can save you a ton of tax