{"id":4139,"date":"2023-10-31T06:12:09","date_gmt":"2023-10-31T06:12:09","guid":{"rendered":"https:\/\/themexriver.com\/wp\/gesto\/2023\/10\/31\/digital-marketing-agency-pricing-guide-copy\/"},"modified":"2025-12-08T22:20:08","modified_gmt":"2025-12-08T22:20:08","slug":"llc-vs-s-corp-which-is-best-for-artists","status":"publish","type":"post","link":"https:\/\/www.createmoney.co\/?p=4139","title":{"rendered":"LLC vs. S Corp: Which Is Best for Artists?"},"content":{"rendered":"\n

If you’re an artist, designer, maker, or any type of creative entrepreneur, chances are you\u2019ve heard you \u201cneed an LLC!\u201d or \u201cswitch to an S Corp to save taxes!\u201d<\/p>\n\n\n\n

But what do those actually mean? And which one is actually best for you<\/em>?<\/p>\n\n\n\n

Let\u2019s break it down in plain English, no accountant jargon, no MBA required.<\/p>\n\n\n\n

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

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First Things First: What Even Are<\/em> These?<\/h2>\n\n\n\n

LLC (Limited Liability Company)<\/strong><\/p>\n\n\n\n

An LLC is a business structure that protects your personal<\/em> assets (your home, car, savings) if anything happens in your business.<\/p>\n\n\n\n

Think of it like a protective bubble around your creative business.<\/p>\n\n\n\n

Key features:<\/strong><\/p>\n\n\n\n

    \n
  • Simple to start<\/li>\n\n\n\n
  • Flexible taxes (you choose how you\u2019re taxed)<\/li>\n\n\n\n
  • Strong liability protection<\/li>\n<\/ul>\n\n\n\n

    Great for most artists starting out.<\/p>\n\n\n\n

    S Corporation (S Corp)<\/strong><\/h2>\n\n\n\n

    An S Corp is not<\/strong> a business type, it\u2019s a tax status<\/em> you elect after<\/strong> forming an LLC or corporation.<\/p>\n\n\n\n

    So you must have an LLC first<\/strong> (or a corporation), then you file a form telling the IRS:
    \u201cHey, tax me as an S Corp now.\u201d<\/p>\n\n\n\n

    Why do people choose S Corp?
    To save money on taxes.<\/strong><\/p>\n\n\n\n

    Specifically: to save on self-employment taxes<\/strong>.<\/p>\n\n\n\n

    How Taxes Work<\/strong><\/p>\n\n\n\n

    LLC (Default Taxation)<\/strong><\/h3>\n\n\n\n

    You pay taxes on your profit through your personal tax return.
    You also pay self-employment tax<\/strong> (about 15.3%).<\/p>\n\n\n\n

    Example:
    If you profit $40,000 \u2192 you pay income tax + self-employment tax on all $40k.<\/p>\n\n\n\n

    S Corp Election<\/strong><\/h3>\n\n\n\n

    You split your income into two parts:<\/p>\n\n\n\n

      \n
    1. Owner salary<\/strong> (taxed normally, includes payroll taxes)<\/li>\n\n\n\n
    2. Owner distributions<\/strong> \u2014 and THIS part is not<\/em> subject to self-employment tax<\/li>\n<\/ol>\n\n\n\n

      This usually means you save money\u2026
      IF (and only if) you\u2019re earning enough to justify payroll.<\/p>\n\n\n\n

      When an Artist Should Stay an LLC<\/strong><\/h1>\n\n\n\n

      You\u2019re better off as a regular LLC<\/strong> if:<\/p>\n\n\n\n

        \n
      • You make under <\/strong>~$60,000\/year in profit<\/li>\n\n\n\n
      • Your income is inconsistent<\/li>\n\n\n\n
      • You don\u2019t want to run payroll<\/li>\n\n\n\n
      • You want simple taxes<\/li>\n\n\n\n
      • You\u2019re still experimenting with your business<\/li>\n\n\n\n
      • You\u2019re not yet paying yourself a steady salary<\/li>\n<\/ul>\n\n\n\n

        For most early-stage artists, an LLC is perfect.<\/p>\n\n\n\n

        When an Artist Should Consider S Corp<\/strong><\/h1>\n\n\n\n

        An S Corp makes sense when:<\/p>\n\n\n\n

          \n
        • You\u2019re consistently profiting $60,000\u2013$80,000+ per year<\/li>\n\n\n\n
        • You can pay yourself a \u201creasonable salary\u201d<\/li>\n\n\n\n
        • You don\u2019t mind bookkeeping + payroll<\/li>\n\n\n\n
        • You want to reduce your self-employment taxes<\/li>\n\n\n\n
        • You\u2019re running a real business<\/em>, not just occasional freelance work<\/li>\n<\/ul>\n\n\n\n

          If you\u2019re making real money consistently, an S Corp can easily save you $3,000\u2013$10,000\/year in taxes.<\/p>\n\n\n\n

          Which Is Best for Artists?<\/strong><\/h1>\n\n\n\n

          Here\u2019s the honest breakdown:<\/p>\n\n\n\n

          Most artists should start with an LLC.<\/strong><\/h3>\n\n\n\n

          It\u2019s simple, affordable, and protects you.
          You don\u2019t need payroll, bookkeeping, or strict compliance.<\/p>\n\n\n\n

          Established artists should consider S Corp (once earning ~$60k+ profit).<\/strong><\/h3>\n\n\n\n

          If you\u2019re making consistent money from:<\/p>\n\n\n\n

            \n
          • commissions<\/li>\n\n\n\n
          • prints<\/li>\n\n\n\n
          • merch<\/li>\n\n\n\n
          • licensing<\/li>\n\n\n\n
          • digital products<\/li>\n\n\n\n
          • freelance design<\/li>\n\n\n\n
          • brand projects<\/li>\n<\/ul>\n\n\n\n

            \u2026then an S Corp can save you serious tax dollars.<\/p>\n\n\n\n

            BOTH can be right \u2014 just at different phases.<\/strong><\/h3>\n\n\n\n

            Think of it like this:<\/p>\n\n\n\n

              \n
            • LLC<\/strong> = beginner-friendly, flexible, protection<\/li>\n\n\n\n
            • S Corp<\/strong> = leveled-up, financially optimized version of your business<\/li>\n<\/ul>\n\n\n\n

              Example Scenarios<\/strong><\/h1>\n\n\n\n

              Scenario 1: New Artist Selling Prints<\/strong><\/h3>\n\n\n\n

              Income is inconsistent, mostly under $4k\/month.
              Best:<\/strong> Regular LLC
              Simple. No payroll. Low cost.<\/p>\n\n\n\n

              Scenario 2: Freelance Designer Making $120k\/Year<\/strong><\/h3>\n\n\n\n

              Stable clients + consistent profit.
              Best:<\/strong> LLC taxed as S Corp
              Huge tax savings.<\/p>\n\n\n\n

              Scenario 3: Tattoo Artist Working for Themselves<\/strong><\/h3>\n\n\n\n

              Income steady, around $7k\/month.
              Best:<\/strong> LLC \u2192 S Corp once consistent
              Protection + tax optimization.<\/p>\n\n\n\n

              Scenario 4: Mixed Artist (commissions + digital products + coaching)<\/strong><\/h3>\n\n\n\n

              Growing rapidly.
              Best:<\/strong> LLC at first \u2192 S Corp after profit hits ~$60\u201380k<\/p>\n\n\n\n

              How to Decide: Quick Checklist<\/strong><\/h1>\n\n\n\n

              Choose LLC if you want:<\/strong><\/h3>\n\n\n\n

              \u2714 Simple taxes
              \u2714 Affordable setup
              \u2714 No payroll
              \u2714 Flexibility
              \u2714 Asset protection
              \u2714 Beginner-friendly structure<\/p>\n\n\n\n

              Choose S Corp if you want:<\/strong><\/h3>\n\n\n\n

              \u2714 Lower taxes
              \u2714 To pay yourself a salary
              \u2714 To keep more profit
              \u2714 To level up your business structure
              \u2714 To separate \u201cyou\u201d from \u201cyour business\u201d financially<\/p>\n\n\n\n

              Final Answer: LLC vs. S Corp for Artists<\/strong><\/h1>\n\n\n\n

              Start as an LLC.<\/strong>
              Switch to S Corp when you\u2019re making consistent money.<\/strong><\/p>\n\n\n\n

              You don\u2019t need an S Corp right away, but once you\u2019re profitable, it can save you thousands.<\/p>\n\n\n\n

              <\/p>\n","protected":false},"excerpt":{"rendered":"

              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.<\/p>\n","protected":false},"author":1,"featured_media":5539,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16,18,73,20,72],"tags":[22,76,80,78,75],"class_list":["post-4139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-income","category-legal","category-startup","category-taxes","tag-business","tag-legal","tag-personal-finance","tag-s-corp","tag-taxes"],"jetpack_featured_media_url":"https:\/\/www.createmoney.co\/wp-content\/uploads\/2023\/10\/llc-or-scorp-scaled.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.createmoney.co\/index.php?rest_route=\/wp\/v2\/posts\/4139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.createmoney.co\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.createmoney.co\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.createmoney.co\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.createmoney.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4139"}],"version-history":[{"count":5,"href":"https:\/\/www.createmoney.co\/index.php?rest_route=\/wp\/v2\/posts\/4139\/revisions"}],"predecessor-version":[{"id":5547,"href":"https:\/\/www.createmoney.co\/index.php?rest_route=\/wp\/v2\/posts\/4139\/revisions\/5547"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.createmoney.co\/index.php?rest_route=\/wp\/v2\/media\/5539"}],"wp:attachment":[{"href":"https:\/\/www.createmoney.co\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.createmoney.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.createmoney.co\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}