Client: A growing IT consultant looking to expand their operations.

Challenge: The consultant was unsure whether to operate as a sole proprietor or form an LLC/S-Corp, leading to confusion about their tax responsibilities and potential deductions.

Solution: After a thorough consultation, we recommended the consultant form an LLC and elect S-Corp status for tax purposes, which would allow them to save on self-employment taxes while gaining liability protection. We also advised on proper bookkeeping practices and tax strategies to optimize their earnings.

Outcome:

– The consultant saw a significant reduction in their self-employment taxes due to the new business structure.

– Their liability exposure was minimized, allowing them to confidently take on larger projects.

– Overall, the consultant had more time to focus on expanding their client base while we managed their tax filings.