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Reply with quote  #1 

I am a sole proprietor and would like to incorporate my business. What is the best corporate structure for a solo attorney?

Andrew Schwartz CPA
Reply with quote  #2 
Great question.

We see that most professionals who have their own practice and do not want to operate as a "sole proprietor" will either incorporate their practice and elect to be treated as an S-Corp, or set up a Single-Member LLC in their state.  Single Member LLCs are supposed to provide the same legal liability as a corporation, but are viewed as a "disregarded entity" for tax purposes.  That means that you would continue to file your taxes as if you would as a sole proprietor - by completing and attaching a Schedule C to your 1040.

There is another strategy that is becoming more popular where people set up a Single-Member LLC, and then file a form with the IRS to elect to be treated as a Corporation.  These taxpayers then file the paperwork to elect S-Corp status.

We generally recommend that someone speak with an attorney before deciding which way to proceed, since this decision impacts your asset protection down the road.

One more thing.  If you will continue to work at one location, and will be opening this business as a side business, you might be better tax-wise if you do not go with the S-Corp.  Check out the article "To Incorporate or Not to Incorporate" that you can find:

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