How accurate is this advisor?

It applies the same revenue + liability + partner + tax framework licensed CPAs use for entity-choice consultations. Personal circumstances vary; a final decision with material consequence should be reviewed by a licensed professional.

When should I form an LLC instead of staying sole prop?

The most common triggers are: revenue above $60K, work that creates real liability exposure, plans to add a partner, hiring employees, or owning real property in the business name.

What about S-Corp election?

For sole proprietors over ~$60-80K of net income, electing S-Corp tax treatment (Form 2553) can save substantial self-employment tax. The advisor flags this when your answers suggest it.

Can I switch entity types later?

Yes. LLCs can convert to corporations, elect S-Corp treatment, or dissolve and reform. Once the LLC is formed, future tax-classification changes are administrative.

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Should you convert from sole prop to an LLC?

Six honest questions, no marketing fluff, plain-English recommendation in 90 seconds. We'll tell you when an LLC actually helps and when it would just add paperwork.

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Revenue $80K + clients depend on work?

YES

RECOMMENDED

Form LLC + S-Corp

Liability shield · ~$8K tax savings

Form LLC only

If under S-Corp breakeven

Stay Sole Prop

Low revenue + low risk

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Should you convert from sole prop to an LLC?

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