Tax Planning/S CORP OR LLC


Hi and thank you for your time. I just recently became a Personal Lines Insurance Agent in the State of Florida. We are 1099 employees with the company. Most of my co-workers that are also agents have incorporated for tax purposes. Some have done an S-Corp while some others have set up an LLC. I expect to make between, $32,000 and $45,000 for the year. The company gives me a desk and phone but I pay for all materials, business card, cell phone use, gas, gifts for clients etc. I am also able to work out of the house up to 2 datys per week. Do you have any recommendations in what to set up. Thanks again in advance for your time!


Steve - I am happy to answer your question.

Remember that the form of business you take (LLC or Corporation) is based on the state you live in.  You get your charter of existence from the state.  You tell the IRS how you want to be taxed.  The best way to be set up tax-wise would be an S-corporation.  This will give you greater control and flexibility over your wages.  You must be sure to take a reasonable wage and the balance can be taken in profit distributions.

It seems that based on your expected earnings, it may make sense to be an S-corporation.  I don't believe that Florida has any tax for an S-corp as the profit pass through to you, but you will have to check on that aspect.

I hope this helps.

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As an Enrolled Agent, I am fully capable of providing tax advice as it relates to personal and business income taxes. Enrolled Agents are the only Federally licensed tax practitioners and are admitted to practice before all administrative functions of the IRS. My specialty is working with small business owners who file Schedule "C" and helping them to structure their business in such a way as to maximize as many tax advantages as possible. I also enjoy working with individuals who have both routine as well as complex tax situations. I prefer to concentrate on individuals and small business tax planning.


I have a 25 year background in financial services including tax, bookkeeping, insurance, real estate and securities. I was previously the Chief Financial Officer of a local and national franchise organization. I am currently semi-retired, but used to own (in partnership with another EA) an individual and small business financial engineering firm where I work with nearly 2,500 individuals and small business owners in nearly every state and almost every continent, assisting them in all aspects of their tax and financial well-being. I have prepared or reviewed more than 8,000 tax returns in my career.

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Enrolled Agent, Admitted to Practice Before the IRS, Accredited Tax Preparer, Fellow of National Tax Practice Institute, Certified QuickBooks ProAdvisor (1999-2011), Sleeter Group Certified QuickBooks Consultant, Life & Disability Insurance Agent License (California, Texas, Maine), Real Estate Agent License (California); Many years of continuing education in all these fields.

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