Is an S corp the same thing as an LLC?

No. An LLC and an S corp are not the same thing. An LLC is a legal business structure you form with your state. An S corp is a federal tax election that tells the IRS how certain eligible businesses want to be taxed. This is why you may hear someone say, “I have an LLC taxed as an S corp.” For a brand-new business, you usually choose the legal structure first, then consider tax elections later when you have clearer revenue, profit, and owner pay.

Steps

1. Separate the legal question from the tax question. Ask, “What legal structure do I want?” before asking, “How should it be taxed?” Those are related, but they are not the same decision.

2. Use an LLC when you want a separate legal entity. An LLC can help separate the business from you personally, create a cleaner setup for contracts and banking, and define ownership.

3. Understand the default tax treatment. A single-owner LLC is typically treated differently from a multi-owner LLC by default. That default may be enough when you are just starting.

4. Do not choose S corp status only because you heard it saves taxes. S corp treatment can add payroll, bookkeeping, tax filing, and compliance work. It may help some profitable businesses, but it is not automatically better for every founder.

5. Get your basics working first. Form the entity if needed, get your EIN, open a business bank account, track income and expenses, and understand whether the business is actually producing steady profit.

6. Talk to a tax professional before electing S corp status. Ask whether your profit level, owner pay, state rules, and admin costs make the election worth it.

If you are still stuck

If you are trying to choose between sole proprietor, LLC, and S corp, use your Stratify roadmap to confirm the next legal setup step. You can also ask the AI coach to explain your options based on your state, business type, owners, and current revenue.