Understanding the difference between SP, LLC, and S-corp

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What Business Entity Should You Choose? is our Doctor Dilemma for this week, and it is featured in our newsletter for this month. Whether you have a side gig or you're going into practice for yourself, I penned this article as a result of being asked this question so frequently in recent weeks. Hope you enjoy it.

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[pistolpete]

So for California physicians, in general, do you still mostly recommend sole proprietorship for incomes of 300-350k, instead of S corp?

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pistolpete wrote:

So for California physicians, in general, do you still mostly recommend sole proprietorship for incomes of 300-350k, instead of S corp?

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It depends on the comfort level of the physician and also on any other mitigating factors. For example:

• Some groups require the physician to be an S-corp to work for them.


• If the physician has other employees besides him/herself, I'd recommend S-corp for protection from the acts of others.


• After we discuss the pro's and con's of the 2 options, if the physician is still uncomfortable about not having a protective entity surrounding him/herself, we go with the s-corp.


• Otherwise, I'm advising to go with sole proprietorship.

I'll post a link to the article on saving taxes with an S-corp when I finish it.