Two years ago, I started a medical writing company of one as a pass through S-Corp. I had been a medical writer for about 15 years as an employee before that. I have a client that gives me 40 hours a week contract, which can potentially last for years.
I worked with my tax attorney/accountant who set it all up.
Benefits are many for me. 1) only work 40 hours a week, no weekends, no nights. 2) Lowest taxes possible 3) Get to expense so many things, like MacBook Air, iPhone, Website, Business email account, Payroll, Windows, LucidChart, Office, professions license fees, continuing education fees, professional meetings, Wall Street Journal, nice pens, standing desk, ergonomic chair, and nice notebooks. If Staples sells it, I can buy anything on a whim, and feel confident I could defend any audit 4) I can mimic many employee benefits, such as paid days off, retirement plan, and annual bonus 5) Can use my newly found spare time to work on fun business projects, which might let me retire in 5 years if it’s successful.
Disadvantages: 1) probably career suicide, but I can be a contractor until I hit 65 in a high paying, low stress job. So I don’t care. 2) Half my revenue stays in my business account and I can only touch my profits once a year or sometimes longer than a year. 3) Low amount
personal checking account and high amount business checking account. So, personally poor and business rich. But YNAB takes care of that and I can even expense YNAB.
So far, happy with my one-man business. But a smart lawyer and accountant are essential. Even in the millionaire next store they say don’t skimp on that.