Should I Make My LLC an S Corp?

An LLC can choose an S corporation tax structure. The S corporation benefits owners by not paying self-employment tax on income.
In general, with around $40,000 net income you should consider converting to S-Corp. The breakeven point could be as low as $25,000 net income.
You must convert to an S-Corp by March 15 to apply for the next year. Or apply within 75 days of opening the LLC to count that year. If you miss the deadline, you may apply for late election relief.

Many US entrepreneurs first set up an LLC because it’s easy and cheap. LLCs offer liability protection and other advantages.
An S corp has a tax classification that an LLC or a corporation can elect. S corps offer liability protection and ownership by US and non-resident owners.

To begin converting an LLC to an S corp, submit Form 2553 to the IRS. Companies shift when it makes financial sense due to taxation differences. Before converting, understand the differences between an LLC and S Corp.
Reverting an S corp back to an LLC is called “revoking” your S corp election. Include a statement revoking the election and names, IDs of all shareholders.

Consider tax classifications when growing a business. Get to know LLCs, S corps, and their implications before deciding. Consult a tax professional to determine if switching to an S-corp fits your situation.

An LLC can choose an S corporation tax structure. The S corporation benefits owners by not paying self-employment tax on income.
Finally, two similarities that both C Corps and LLCs share are that both entities offer limited liability protection and they can be owned by both U.S. and non-resident owners.