LLC vs. S-Corporations in Californai

Shamal Asnani
September 30, 2019

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Tax Difference between LLC and S-Corp in California

  • How to file an S-Election or S-Corp conversion in California
  • Are S-Corps worth in in California?
  • What is the Tax Rate on S-Corporations in California?
  • Do S-Corps Require Payroll in California?
  • What tax forms must S-Corporations file in California?
  • How much might you save with an S-Corp in California?

California S-Corporations Sub Chapter S Conversions

Most small business owners and 1099 income earners we meet want to know the answer to one question:

Is it worth it to convert to an S-Corp in California?

This question arises because most freelancers and small business owners have heard that an S-Corp can help reduce self employment and medicare taxes.

But California is a different beast because it has implemented what's called the California Franchise Tax Board tax which creates some nuance for S-Corporations.

How are Sole Props & S-Corps Taxed?

Simply state, every Sole Proprietorship will pay social security and medicare taxes on their net profits, at least up to the social security limits.

Medicare and Social Security Taxes are often called "Self Employment Taxes", and they add up to 15.3%.