Chucks
Nov 21st 2010
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I'm self employed and curious if there are any benefits to forming a corporation? If so, which state should I form the corporation in for tax purposes?
3 Answers - Answer by Chucks

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It depends if you want to open an LLC, C-Corp or S-Corp. Every structure has its own advantages and disadvantages. I also don't think you can really 'avoid' any taxes by filing in another state than your own. If you're doing business in your state, you will have to be registered there, so there's no way around. A good service for setting this up is Legalzoom.com, though they are not lawyers. You may want to review your situation with a lawyer to see what structure works best for you. And then you can use Legalzoom to actually file the paperwork. It's usually pretty fast.

Also for social security (pretty sure) you are paying both parts with self-employment, whereas with some other business entity, you only pay the employee portion. The corporation pays the other part.

You need a good accountant, since they are the ones that know how provide you with the benefits that go with the added complications. They can advise you better on the structure, and you will need them to file your taxes when you do have it set up. They will probably tell you to use an S-Corp which allows loses to benefit you personally as the shareholder.

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