LLC vs S-Corp for one-person businesses: the tax math that actually matters
A single-member LLC is the default structure for most solo business owners in the United States, and it remains the right choice for a sizable share of them. But once net income crosses roughly $80,000 to $100,000 per year, the math starts pointing toward an S-Corp election, and by $150,000 it's almost always the better answer from a pure tax-savings perspective. The reason this conversation matters now is that the gap between the two structures has widened. Self-employment tax rates haven't dropped. The qualified business income deduction interacts differently with each entity. Reasonable compensation rules have tightened in some industries.…
