Here are some definitions to help you determine which plan is right for you.
Your practice is a Sole Proprietorship or Single Member LLC
If you start seeing clients without forming an LLC, then you’re taxed as a sole proprietor. You have one tax return (Form 1040) which you submit with a Schedule C to report your self-employment income and expenses.
If you form an LLC, then you’re still taxed as a sole proprietor, unless you elect to be taxed as an S corporation by the IRS.
Your practice is an S Corporation
If you’re taxed as an S Corporation, then you have two tax returns. You file a business tax return (Form 1120-S) and personal tax return (Form 1040). In order to be taxed as an S corporation, you need to first form an LLC (or professional corporation in CA) and then submit Form 2553 to the IRS.
Still not sure? Book a free demo with our team and we’ll help you pick the right plan for your practice.