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Originally posted by mrblue
I'm interested in this exact subject as well. I'm looking at either an LLC or an S Corp. Both have the advantage of no double taxation, but I've heard and S Corp is less to do in terms of paperwork than an LLC.
Also I've heard a lot about incorporating in Deleware. Anyone have any hints on this?
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I've only got a few minutes, so I'll jump in here real quick.
LLC - no required salary.
S Corp - shareholder that works is required to take a salary. So, W-2, 940 and 941, state forms, etc. need to be filed at least quarterly.
Initial paperwork is about the same.
And as far as incorporating in other states without income taxes - this is kind of a myth. Oregon has a "throwback" law, for example, where income that would not be subject to taxation in another state will be "thrown back" into Oregon for tax purposes. Also, for multi-state taxes you apportion your income based on a few things.
Revenues
Rents for real property
Inventory
Fixed assets
So you might be incorporated in another state, but if you are essentially running it fro myour home state, all the income should be apportioned back anyways. So....unless you blatently lie on your tax forms, you wind up paying the same tax. Not to mention creating nexus in other state taxation districts, which is a whole 'nother thread.