AboutAlexandra Shainskaya, CPA Expertise Can answer questions relating to individual and small business tax returns and tax planning.
Experience I am the founder and President of Tax & Business Advisory Services LLC, a boutique accounting firm that specializes in tax planning and preparation for individuals and small businesses.
Education/Credentials New York University Stern School of Business, 2005
Accounting and Finance
Question Recently I have become a contractor of a company and am wondering about the tax advantages/disadvantages. The big question is, is it more beneficial to do my taxes as an individual or a small business?
Answer Dear Yolanda,
I think your question is actually whether to stay a Sole Proprietor or to organize an entity (LLC, C-corporation, or S-corporation). This is a very personalized and detailed question which I can't adequately answer without knowing your full situation. I can just tell you generally about the entities if that could help you a little. As a sole proprietor, you report your business income or loss on Schedule C of Form 1040. If you form an LLC, you can elect to still be taxed as a sole proprietor but you have a corporate-type liability protection (in most states). An S-corporation is similar to an LLC in that you can elect to avoid corporate taxation, but the forms you file and they way you are taxed is different.
This is a difficult question that needs analysis particular to your situation, and not only from a tax point of view. You should consult a professional in your area to help you make the decision.
Best regards,
Alexandra Shainskaya, CPA
www.TaxBusinessAdvisory.com
