Tax season always brings questions, and one of the biggest ones we hear from freelancers and small business owners is this: Should I stick with a Single-Member LLC or elect S-Corp status?
The choice may sound like just paperwork, but it directly impacts your taxes, your liability, and the way your business grows. At O&K Accounting, we’ve helped hundreds of entrepreneurs across Seattle, Tacoma, and beyond make this decision with confidence. Here’s what you need to know.
What is a Single-Member LLC?
A Single-Member LLC (Limited Liability Company) is often the first step for solo entrepreneurs. It’s simple, affordable, and keeps your personal and business finances separate.
Why it works well:
- Provides liability protection, so your personal assets are safe if the business faces debt or lawsuits
- Straightforward taxes, since profits are reported on your personal tax return
- Flexible setup with fewer compliance requirements compared to corporations
Freelancers, consultants, and early-stage business owners who want a clean and professional structure without a lot of extra paperwork are best fit.
What is an S-Corp?
An S-Corporation isn’t a new type of business but rather a tax status you can elect for an LLC or a corporation. Choosing S-Corp status can open the door to significant tax savings, but it comes with added responsibilities.
Why it works well:
- Potential for tax savings by dividing income between salary and distributions, which can reduce self-employment taxes
- A more professional image that can build trust with clients and investors
- Ideal for businesses that are consistently profitable and looking to scale
Established small businesses, growing agencies, or entrepreneurs earning higher net income who are ready for a more advanced tax strategy.
LLC vs. S-Corp: A Quick Comparison
| Feature | Single-Member LLC | S-Corporation |
|---|---|---|
| Formation | Simple, quick setup | Requires IRS S-Corp election |
| Taxes | Pass-through (on personal return) | Salary plus distributions |
| Self-Employment Tax | Full amount applies | Reduced through distributions |
| Compliance | Low | Higher (payroll, filings, reports) |
| Best For | Freelancers, consultants, solopreneurs | Businesses with steady profits |
Mistakes to Avoid
- Waiting until tax season to decide on your business structure
- Choosing an S-Corp too early, when income isn’t high enough to justify it
- Forgetting that S-Corp owners must run payroll correctly
How O&K Accounting Helps Business Owners
Choosing between an LLC and an S-Corp isn’t just about filling out forms. It’s about finding the right path for your unique business. That’s where our team comes in.
At O&K Accounting, we handle everything from:
- Entity setup and EIN registration
- Strategic tax planning tailored to your income
- Bookkeeping and compliance support year-round
With offices in Seattle and Tacoma, we’ve supported more than 1,000 businesses across 20 industries. Our clients trust us because we combine precision with personal care, making sure nothing slips through the cracks.
Ready to take the next step? Book a consultation with our experts and launch with confidence this tax season.
Why Clients Choose O&K Accounting
- 96% client retention rate
- 99% of reports delivered on time
- 700+ tax returns filed every year
“O&K Accounting made everything incredibly easy and painless. Their personalized approach always exceeds expectations. I’m so grateful for their reliable and affordable service.” – Fitz C., Entrepreneur
Final Thoughts
If you’re a freelancer or small business owner, deciding between an LLC vs S-Corp can feel overwhelming. But with the right guidance, it can also be one of the smartest financial decisions you make this year. At O&K Accounting, our mission is to simplify the process, maximize your savings, and give you the peace of mind that your business is built on solid ground. Whether you’re starting fresh or preparing for the next stage of growth, we’re here to help.
