Starting a company does not mean just registering one. So don't go by online companies. Go to a CPA and do it all. I have recently registered an S corp using one of those online companies. But i have a lot of tax and IRA related questionsthat only a CPA / Accountant can answer. So even if you register online, you need a CPA for advise. So it is always better to do every thing through CPA.
Regarding choice between S corp and LLC, my advise to people is that (for people who start a companywith the main aim of working as consultant/contractor and doing consulting business ) , if your hourly rate is < $60, then go for S corp. If your billing rate is > $70/hr, then go for LLC. If the rate is between $60 and $70, then it's a tough choice (i mean, it's a border case). The reason is that, with S corp you don't need to pay SS tax (social security tax) on profits. So you can take less pay and more dividend so that you can save on SS tax. But there are limits to how low your salary can be. You can't have an income of > 150K and salary of 50K or less (though some people take that risk). But you can have an income of 120K and salary of 50K (assuming 20K expenses and 50K dividend ). This way you are not paying SS tax on the dividend of 50K, where as a LLC person has to pay SS tax on the dividend upto 90K ( salary + dividend = 90K). So in the example i ghave shown (120K income), LLC person will pay SS tax on 90K where a S corp person will pay SS tax on 50K. The advantage with LLC is that it is easy to maintain and there are less paper work and less head aches involved.
This SS tax is applicable for first 90K of your salary.
