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What is the difference between an LLC and an S corporation?
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The main difference between an LLC (Limited Liability Company) and an S corporation (S-Corp) is the taxation structure. An LLC offers pass-through taxation, which means that the business itself does not pay taxes on the profits, instead all profits and losses are "passed through" the business to the individual owners, who then report their portion of these on their personal tax returns. An S corporation, on the other hand, offers more tax advantages and protection, as this designation allows the business owners to pay themselves in the form of wages and dividends, which are subject to different tax brackets.