Sole Proprietorship vs. LLC: Tax Benefits and Differences
Deciding on a business structure is a massive step. We break down how operating as an LLC can unlock advanced tax strategies like S-Corp election.
Default Tax Treatment
By default, a single-member LLC is taxed the same as a sole proprietorship. However, the LLC provides crucial liability protection.
The S-Corp Advantage
Collective uses AI to determine exactly when your revenue hits the threshold where electing S-Corp status will save you thousands in self-employment taxes.