For a new business what would be the most tax-advantaged entity to file under?
Currently assuming this would be a pass-thru (professional services) business filing Schedule C with very few deductions.
Will be contributing the max to an i401k (no employees) 19k + 6k (over 50 y.o.) plus 20% of the net profits.
For simple math let’s assume this business makes 100k net profit after expenses
- 25k contribution to 401k (19k + 6k employee contribution)
- 20k (20 % of 100) for employer contribution
- 14 k SE taxes
- fed tax ?
- state tax?
Is there a spreadsheet around that could be used for different scenarios to see what’s best ?
I realize there isn’t a simple yes/ no answer, but this business is unlikely to gross more than 100k in the first year and it is unknown whether it will continue or how long it will exist.
So initially it doesn’t seem to make sense to go to the expense of setting up an S-corp given the unknown future viability of it.
Other options ?