Are there any tax benefits to forming an LLC over a sole proprietorship (I know liabilities are better with LLC)?
      Answer1:Not really. Its easier to prepare a schedule C than the completely separate return for an LLC, so in that respect, its cheaper for a sole proprietorship. But Schedule Cs are audited more often than the returns for separate entities (as long as theyre prepared by a professional, however, you wont have a problem either way).So really, its only a cost thing. The tax liability flows through to your personal return without any special breaks either way.Good luck. :0)
      Answer2:If you are the only member of the LLC and you do not elect corporate tax status than the IRS considers you a sole proprietor anyway - they call it a Disregarded Entity and all taxes and forms are the same as sole prop. Its a popular misconception that you are provided more protection personally by registering as an LLC - if your business insurance is good then having LLC after your name doesnt matter much except in some very rare cases and your attorney can advise you of that.