It's not that big of a deal. It can help you with investing back into your business, especially if you have a lot of hardware to buy to operate it, as well as easier to write off business travel, rent, etc. However those are all practical. Your individual income will still be taxed at the same rate. It really just makes your paperwork a bit easier than if you went with a sole proprietorship, there's not a huge difference in overall tax rate.
I can’t figure out what to deduct that is more than the $12.2k single filer deductible. I have $500k/yr I’d love to pay less taxes on at the moment due to a booming side business + healthy salary. Can’t find any deductions worth my time and the CPA filing fees.
In Australia, it’s not so much deductions (home office, car, computer, phone, etc), as much as absurdly legal practices like “distributing” income to your family. This means you can divvy up your income so it’s taxed at each family member’s marginal rate (rather than your own top-line consolidated rate).
That might sound reasonable, until you realize that those family members never see that money. The “distribution” is a complete fiction.
I’m usually fairly conservative when it comes to taxes, but I’m astonished this is allowed to continue.
CPA wanted $3,500 to set up an LLC and turn it into an S-corp + the filing for the year. Said we could deduct 80% of my car and some knick knack stuff. Ran the math, came out to be breakeven. Get $3,500 back to spend $3,500, risk an audit, lots of headache, not worth it to me.
Probably the best reason for an LLC in your case is to split up your finances and protect your personal property (house/cash/other assets) in case your business gets sued. I don't think the tax advantages are huge but the potential losses difference if sued can certainly be huge if you don't separate your assets. I'd be surprised if your accountant didn't bring that up though.