If you’re an artist, designer, maker, or any type of creative entrepreneur, chances are you’ve heard you “need an LLC!” or “switch to an S Corp to save taxes!”

But what do those actually mean? And which one is actually best for you?

Let’s break it down in plain English, no accountant jargon, no MBA required.

Put simply: An LLC is a business structure that protects your personal assets, while an S Corp is a tax status an LLC can elect to potentially reduce self-employment taxes.

First Things First: What Even Are These?

LLC (Limited Liability Company)

An LLC is a business structure that protects your personal assets (your home, car, savings) if anything happens in your business.

Think of it like a protective bubble around your creative business.

Key features:

• Simple to start
• Flexible taxes (you choose how you’re taxed)
• Strong liability protection

Great for most artists starting out.

S Corporation (S Corp)

An S Corp is not a business type, it’s a tax status you elect after forming an LLC or corporation.

So you must have an LLC first (or a corporation), then you file a form telling the IRS:
“Hey, tax me as an S Corp now.”

Why do people choose S Corp?
To save money on taxes.

Specifically: to save on self-employment taxes.

How Taxes Work

LLC (Default Taxation)

You pay taxes on your profit through your personal tax return.
You also pay self-employment tax (about 15.3%).

Example:
If you profit $40,000 → you pay income tax + self-employment tax on all $40k.

S Corp Election

You split your income into two parts:

1. Owner salary (taxed normally, includes payroll taxes)
2. Owner distributions — and THIS part is not subject to self-employment tax

This usually means you save money…
IF (and only if) you’re earning enough to justify payroll.

When an Artist Should Stay an LLC

You’re better off as a regular LLC if:

• You make under ~$60,000/year in profit
• Your income is inconsistent
• You don’t want to run payroll
• You want simple taxes
• You’re still experimenting with your business
• You’re not yet paying yourself a steady salary

For most early-stage artists, an LLC is perfect.

When an Artist Should Consider S Corp

An S Corp makes sense when:

• You’re consistently profiting $60,000–$80,000+ per year
• You can pay yourself a “reasonable salary”
• You don’t mind bookkeeping + payroll
• You want to reduce your self-employment taxes
• You’re running a real business, not just occasional freelance work

If you’re making real money consistently, an S Corp can easily save you $3,000–$10,000/year in taxes.

Which Is Best for Artists?

Here’s the honest breakdown:

Most artists should start with an LLC.

It’s simple, affordable, and protects you.
You don’t need payroll, bookkeeping, or strict compliance.

Established artists should consider S Corp (once earning ~$60k+ profit).

If you’re making consistent money from:

• commissions
• prints
• merch
• licensing
• digital products
• freelance design
• brand projects

…then an S Corp can save you serious tax dollars.

BOTH can be right — just at different phases.

Think of it like this:

• LLC = beginner-friendly, flexible, protection
• S Corp = leveled-up, financially optimized version of your business

Example Scenarios

Scenario 1: New Artist Selling Prints

Income is inconsistent, mostly under $4k/month.
Best: Regular LLC
Simple. No payroll. Low cost.

Scenario 2: Freelance Designer Making $120k/Year

Stable clients + consistent profit.
Best: LLC taxed as S Corp
Huge tax savings.

Scenario 3: Tattoo Artist Working for Themselves

Income steady, around $7k/month.
Best: LLC → S Corp once consistent
Protection + tax optimization.

Scenario 4: Mixed Artist (commissions + digital products + coaching)

Growing rapidly.
Best: LLC at first → S Corp after profit hits ~$60–80k

How to Decide: Quick Checklist

Choose LLC if you want:

✔ Simple taxes
✔ Affordable setup
✔ No payroll
✔ Flexibility
✔ Asset protection
✔ Beginner-friendly structure

Choose S Corp if you want:

✔ Lower taxes
✔ To pay yourself a salary
✔ To keep more profit
✔ To level up your business structure
✔ To separate “you” from “your business” financially

Final Answer: LLC vs. S Corp for Artists

Start as an LLC.
Switch to S Corp when you’re making consistent money.

You don’t need an S Corp right away, but once you’re profitable, it can save you thousands.