2012: S-Corp or LLC? Which Is Best for Your Business?

**Farnoosh Torabi** (0:00)
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So Money Episode 2012, S-Corp vs. LLCs. Which one should you be? Our guest is Hannah Cole, founder of Sunlight Tax.

**SPEAKER_2** (1:05)
Sorry, you're in the wrong place. Seeking profound ways to live a richer, happier life.

**Hannah Cole** (1:14)
Gosh, the number of people that I see who form an S-Corp, not even knowing what its purpose is or what it's doing for them, and honestly do the setup wrong and then get in a lot of massive trouble. It's a big deal. It happens.

**Farnoosh Torabi** (1:26)
Welcome to So Money, everybody. I'm Farnoosh Torabi. If you're a business owner or are looking to start a business, you must listen and save this episode. This is going to be a capsule podcast where it will be referenced often. And I will be referencing it often. One of the biggest questions I've received from our listeners, our community, especially those who are entrepreneurial, is this, should my business be an LLC or should it be an S-Corp? And friends, I don't have the answer to that. I am an S-Corp, but I know others who have LLCs, people who are in the same industry as I am. And it's always been curious to me. It was the recommendation of my accountant and I just went with it. And so far, knock on wood, things are going great. But I learned a lot in this episode. I got schooled on LLCs and S-Corp in 30 minutes by our guest, Hannah Cole. She's a friend of this podcast, founder of Sunlight Tax. And Hannah walks us through the differences between the two business structures, why you might want to be both an S-Corp and an LLC. Did not know that was possible. At what income level does it make sense to be either an S-Corp or LLC? And how can we leverage artificial intelligence to make tax prep and tax organization a lot easier and most importantly cheaper for us? Hannah has some trusted resources. Tax Nerds Unite. This episode is for you and honestly anybody who's looking to start a business. This is important stuff. Here's Hannah Cole.
Hannah Cole, welcome back to So Money, our resident tax expert, humanizing taxes for the masses, for the humans. Welcome back.

**Hannah Cole** (3:06)
Thank you so much, Farnoosh, so happy to be here.

**Farnoosh Torabi** (3:08)
First off, breaking news. Can I say this?

**Hannah Cole** (3:11)
Yeah, you can say it.

**Farnoosh Torabi** (3:13)
You heard it here first. Hannah Cole has signed a book deal, everybody.
I'm so excited for this book, chiefly because you're writing it, and I think you're the best person to write the next tax book. Because I'll tell you, I've never read a tax book in my life. I think I might read yours. I will definitely read yours. I'll be giving yours away. Tell us about your book.

**Hannah Cole** (3:35)
Yeah. It's called Taxes for Humans, and Wiley is the publisher. And my idea is that I just want to give a really useful book. It's kind of the book that I wish I had had, and that everybody needs to do your taxes, especially for people who have freelance income or who are self-employed. But even more holistically, to just understand kind of the why behind the tax codes, because you have to do your taxes, right? Like whether you want to or not, whether you feel technically inclined or not. So the point is really like absolutely no jargon, no shame approach.
That's super practical and like helps you get it done.

**Farnoosh Torabi** (4:18)
Very important. I can't wait. Thank you for taking on this initiative.
Because it's, it's so important. Like you say, you can't avoid it. But we're all capable. We are all capable.

**Hannah Cole** (4:33)
Absolutely.

**Farnoosh Torabi** (4:34)
What we're going to focus on today, and you've been on the show numerous times, but we promise that we would bring you back to talk specifically about LLCs versus S-Corps. And if you're listening and you're running a business, whether it's just you're a solopreneur, you have multiple employees, whether you're at the start of it or you're in the middle of it, you probably second guess this move. I'm an S-Corp.