BUSINESS ENTITY FORMATION From LLCs to S-Corps, We Form It All

Choosing the right business entity affects how much tax you pay, how you pay yourself, your audit risk, and how protected you are. Tax Scout forms LLCs, partnerships, and S-Corps, and because we’re tax accountants first, the entity we recommend is the one that saves you the most.

Connected network of pins representing business entity formation services

Single Member LLC

An LLC is registered in the state of formation. It offers limited liability protection and pass-through taxation, and “single-member” means the LLC has one owner. Key points:

  • Files on Schedule C with your personal return, usually due April 15th
  • Simple to run, with minimal extra accounting

We file the paperwork to form LLCs.

Partnership LLC

A partnership LLC is essentially the same as a single member LLC, but with more than one owner. It also offers limited liability protection and pass-through taxation. Key points:

  • Files Form 1065, usually due March 15th
  • Each partner receives a K-1 for their share of income

We file the paperwork to form partnerships.

S-Corp

An S-Corp does not describe the legal entity of a business – it determines the way your LLC or corporation is taxed. Key points:

  • Big potential tax advantages through a salary-plus-distributions structure
  • Additional accounting rules, payroll requirements, and fees apply
  • Files Form 1120S, usually due March 15th

We file the paperwork to form S-Corps.

Once your entity is formed, our Small Business Tax Experts handle the ongoing tax strategy and filings.

Frequently Asked Questions:
Business Entity Formation

What is the difference between an LLC and an S-Corp?

An LLC is a legal entity formed with the state; an S-Corp is a tax election that changes how your business income is taxed. Your LLC can elect S-Corp taxation once the tax savings justify the added payroll and accounting requirements. We run the numbers before recommending it.

If you have business income and personal assets to protect, usually yes. An LLC separates business liability from your personal assets and opens the door to tax elections like the S-Corp. A quick call with us will tell you if it’s worth it in your situation.

A common rule of thumb is when annual net profit consistently reaches around $50,000. S-Corp elections are generally due March 15th for the current tax year, though late elections are sometimes possible. Late elections can save you a ton of money, so call us to discuss – this is a complicated topic.

Pass-through taxation means the business itself doesn’t pay federal income tax. Profits “pass through” to the owners’ personal returns. LLCs, partnerships, and S-Corps are all pass-through entities – which is why owner-level tax planning matters so much.

Yes. Many businesses start as a single member LLC and elect S-Corp taxation when profit grows. Changing legal structure (like adding a partner) is also possible but has tax consequences that should be planned.

Online services file paperwork; they don’t know your tax situation. Many also outsource the work overseas, where someone gathers your personal information and files exactly what you tell them to – with no advice on whether that’s the right decision for your taxes. We recommend the entity based on the taxes you’ll actually pay, discuss it with you, and then move forward. We complete the formation, obtain an EIN, make elections on time, and then prepare the returns – one accountable team, year after year.