LLC vs S-Corp vs C-Corp: Which is Right for Creators?

LLC vs S-Corp vs C-Corp: Which is Right for Creators?

Whether you're thriving on OnlyFans, monetizing your YouTube channel, or building a paid Substack community, choosing the right business structure can mean the difference between overpaying in taxes and keeping thousands in your pocket. This guide explains the differences between an LLC, an S-Corp, and a C-Corp — specifically for creators and online influencers.

👕 LLC: The Starter Structure (Default Taxed)

An LLC (Limited Liability Company) is the go-to starting point for creators. It protects your personal assets and is simple to set up. By default:

  • If you’re solo, it’s taxed like a Sole Proprietor.
  • If you have a partner, it’s taxed like a Partnership.

Pros:

  • Simple tax reporting
  • Protects personal assets
  • Flexible — you can switch to S-Corp or C-Corp later

Cons:

  • You’ll pay 15.3% self-employment tax on all your net income

🧾 Tip: Use Zoho Expense to track every business expense (subscriptions, equipment, rent, travel) so your tax pro can lower your net income before you get hit with self-employment tax.

🧑‍💼 S-Corporation: Best for Creators Earning $50K+

An LLC can elect to be taxed as an S-Corp by filing IRS Form 2553. This can lower your self-employment taxes.

Pros:

  • Only pay self-employment tax on your salary, not your total income
  • Potential to save $5K–$15K+ per year if income exceeds $75K

Cons:

  • You must run payroll (use Gusto or Zoho Payroll)
  • Requires formal bookkeeping and annual tax filings

✅ When to choose: If your creator brand earns net income above $50K per year and you’re ready to outsource payroll/bookkeeping.

🏢 C-Corporation: Rare for Creators, but Sometimes Useful

Creators can also have their LLC taxed as a C-Corp using IRS Form 8832. This is uncommon but may be strategic if:

  • You plan to reinvest most profits
  • You want to offer fringe benefits (retirement, healthcare, etc.)
  • You’re building a media company that will raise capital

Cons:

  • Double taxation (C-Corp pays tax, then shareholders pay again)
  • Strict recordkeeping and IRS scrutiny

🔁 Use with caution: The IRS charges penalties for late elections and accumulated earnings. Speak with a tax advisor before filing Form 8832.

📌 Key Differences At-a-Glance

Entity Type Best For Tax Filings Self-Employment Tax Savings Complexity
LLC (Default) New creators or side hustlers Schedule C (Form 1040) None Low
LLC taxed as S-Corp Creators earning $50K–$250K+ Form 1120-S + W-2 High Medium
LLC taxed as C-Corp Scalable brand or media company Form 1120 None (double tax) High

🔐 IRS Audit-Proof Tip

Maintain digital receipts and categorize expenses monthly in Zoho Expense. This ensures your records align with IRS Publication 583 guidelines and protects you in the event of an audit.

📲 Need Help Filing?

If you're ready to elect S-Corp or C-Corp status, we’ll help prepare and submit IRS Form 2553 or 8832 for your LLC and ensure your accounting setup meets IRS standards. Gbooks is a certified Zoho Finance Partner.

Not sure what to pick? Let’s talk strategy. Book a 15-minute consultation with Gbooks today.

This article is for informational purposes only and is not legal or tax advice. Please consult a qualified tax advisor for your unique situation.