LLC vs. S-Corp: What’s Right for You in 2026?

Before we talk llc, before we talk S Corps, I want to slow you down today because if you click this video, you're probably not reckless. You're thoughtful, you're building something real, and you're trying to make smart decisions with incomplete information.If you see my show before, you're probably wondering, why is Ralph sitting here in the dark? Well, this is what I found, is what most content creators in the dark as well when it comes to this topic today.And being in the dark is not a great place to start. This is how it usually sounds when someone sits down across from me. They lean back, they take a breath, and they say something like this.I think I did this right, Ralph. But I'm not totally sure. And that feeling is not panic. It's not chaos. It's just that quiet uncertainty.But that uncertainty can get expensive, because when you're not sure, you hesitate, you guess you copy someone else. So today, this isn't a video to get you through. This is a conversation we need to take to really dive in.Because clarity beats confidence every single time.

Every beat I drive just opens the door. Yeah, I'm rising, climbing, flipping the scene Break the chain, strike the dream. I'm a creator, a creator on fire.

If we were sitting across the desk, this is where I'd tell you who I am. I'm Ralph Estep Jr. I'm the content creators accountant. I'm a licensed accountant. I've been doing this for decades.But what matters more here is this. I work with content creators constantly. And guess what? I'm a content creator myself. So I understand this topic today.I understand those income swings. I understand that pressure. Hey, I understand the gear purchases. I understand no subscriptions.And I understand that fear of doing it wrong and not finding out until it's too late. And in my own career, I've seen creators win with this. And unfortunately, I've seen creators quietly regret it. So my goal today is simple.If you want to understand what makes sense for you, not feel pushed towards a structure you don't fully understand, then that's why you're here today. So let me say this early because it takes the pressure off of everything else.If at any point you're listening and thinking, Ralph, I. I just want somebody to look at my numbers. I don't want to guess. I don't want to unwind a bad decision later, you can book a call with me. Go to content creators accountant.com help me.Yes, help me. Go to content creators accountant.com help me. It's not a sales Pitch. It's all about clarity. Just you and me, your situation.No pressure, but guess what? Immediate results. All right, let's talk about why this is so confusing for creators. The truth is, creators don't grow in straight lines.If you're like me, your income jumps, then it stalls, it spikes, and then it dips. Well, business structures don't like that. Business structures love predictability. So in the content creator realm, what happens?Creators hear advice meant for stable businesses, and they try to apply it to their creative businesses. Problem is, that's a mismatch. And that's where problem starts.Because what I have seen is most bad LLCs and S Corp decisions aren't made out of ignorance, they're just made out of urgency. But let me share this now. If you do nothing after this episode, here's what usually happens.You're going to keep creating, you're going to keep getting paid, and the money keeps hitting your account. But here's the problem with that. That back end is going to stay fuzzy.Then what's going to happen is one day you're going to get a 1099 you didn't expect, or your tax bill is going to be way bigger than it should be. Your account is going to say, guess what? Look what you owe. Or you're going to realize you can't prove half your expenses.Or for so many of us, that brand deal is going to go sideways and everything falls back on you personally. And you're not in trouble because you're a bad person. You're in trouble because your business grew faster than your systems.So the question isn't, do I want to deal with this? The question is, do I want to deal with this now?Do I want to deal with this calmly, or do I want to deal with it in a state of panic when a deadline is staring at me? Well, let's start by talking about LLCs, because this is where most confusion starts. I want to say something basic. An LLC is not a tax strategy.And I know that surprises a lot of people. I've had creators say to me, I formed an llc, Ralph, and my taxes didn't change exactly, because an LLC is nothing more than a legal container.We covered the basics of an LLC in our first episode. You can find that @content creators accountant.com so if you want to go back and check that out, you can.But an LLC's job is to separate you from the business. But here's the part nobody wants to explain. That only works if the business actually lives inside that container. What does that mean?It means that brand deals are signed by the business. The money lands in business accounts, expenses are paid from business accounts, and your contracts match the business name.Not kind of, not sort of always. And actually, I'll never forget, I worked with a YouTuber who was competent. When he came in to sit with me, he said, Ralph, I've got an llc. I'm good.I didn't know if he was so good. So I asked him some simple questions. I asked him this first question. I said, where does the money go when it comes in?And then I said to him, hey, whose name are the contracts in and what account pays the expenses? Well, when I got under the code, this is what I found. Everything was still personal.He was using the same bank account, the same cards, the same habits. And then a brand deal went sideways. If you've been doing content, you know this will happen sometimes.And suddenly, the thing he thought was protecting him wasn't protecting him at all. Not because LLC don't work, but because he never actually used it. Well, at least he didn't use it the correct way. And now it's costing him.So what do we do? We rebuilt everything. We separated the accounts, we created proper contracts, and we built a cleaner structure.And the relief he felt, you could hear it. But let me pause here. I want to ask you this.If something went wrong with your business, would it stand on its own, or would everything fall back on you personally? Just want you to sit with that for a moment. See, that's what we've got to get solved today.Let's talk about when an LLC is the right move, because there is a difference here. I work with another creator, made about $4,000 a year. There was a small audience. He was still experimenting.He was new to the industry, like all of us were. At one point, he almost didn't form an LLC because someone told him this big lie. You're too small. I've heard that many times. It's terrible advice.But he was signing contracts, and he was putting his personal name at risk every time he signed one of those. And for him, the LLC wasn't about taxes. It was about sleeping at night. Here's a key takeaway. LLCs are about risk, not revenue.Let's pivot a little bit and talk about S Corporations. Fancy name. Well, I'm going to break it down for you right now. This is where creators get hurt. Unfortunately, an S Corporation is not a business.It's not some badge that you wear. And it's not a level up. It's A tax election. That's it. Nothing more, nothing less. It's got a really simple job.Its job is to reduce self employment tax when the math supports it. So now you're asking me, Ralph, what is self employment tax? You promised you weren't going to lose me in arguing. Well, let me get right to it.Self employment tax is the tax content creators must pay to cover their Social Security and Medicare contributions because they're earning income as independent creators rather than traditional employees. Sounds simple, right? But that's not the big problem.Unlike someone working for a company where the employer pays half of these taxes, creators must pay both sides themselves. That's why this feels so much heavier. It's an additional 315 plus percent on top of your federal and state taxes. Yeah, that one hurts.So let me tell you this story. A podcaster came to me making around $32,000 a year. Someone online had told him, you need to be an S corporation. This is how you save money.So what'd he do? He went with an S corporation thinking this would be perfect. You got to love that online advice. Not always on point, though.He did not save any money. Instead, guess what happened? He found out that he had to do payroll that he didn't understand.He paid a bunch of extra fees, extra filings, and more stress than he could handle. I never forget when he called me, he said, Ralph, I feel like I made things harder for no reason. Yes, that's exactly what he had done.Just that he created a mess for himself and I helped him fix it. What do we do? We rolled it back and the relief was immediate. Here's the problem.He lost some real money, which he could have saved if he had just reached out to me from the start. But we'll talk about more of that later. Let's talk about some myths I've heard lately in regards to LLCs and S corporations. Here's myth number one.An LLC lowers taxes. Nope, that is not correct. An LLC is a legal container. It's not some tax coupon. It's not a get out of tax free jail coupon. That's not what it is.Here's myth number two. An S corporation is always better. Listen, when I hear the word always, I always say, no, that's not true. An S corporation is a tool.But a tool only works when the timing is right. Here's myth number three. Once I pick one, I'm stuck forever. No, it's not like luggage. That's not true. You can adjust it as your creator.Business changes. And see that Right there is why you don't copy another creator setup. So many people do that. Well, let me go see what works for somebody else.You've got to build your own setup. And here's why. S corporation advice spread so fast. And I've seen this in my 30 year career. Here's why.Because it worked for someone, it worked for that person at a certain income level, or that person had a certain state of where their business was, or maybe they were in a certain season, and then it got repeated without any context. Those shortcuts sound smart until you have to pay for them. Let's talk about the other side of this.Another creator had clean books, consistent income. He was making about $65,000 a year net. That's great. So what do we do? We slowed everything down. We put him on a salary.We understood distributions, we understood the compliance costs. We didn't rush into it. And guess what? I saved him over $8,000 in one year. Same structure, but a different season.So let me give you a simple creator roadmap that I know that will work for most content creators. I call the three lane approach. Let's talk about lane one. It's what I call the starter lane. Yes, you're getting paid, but it's inconsistent.This is where an LLC plus some clean setup usually wins. You're not ready for the next step yet. You're in that starter lane. You don't have that consistent income. You got to have clean books.That's where an LLC works. Let's think about lane number two, what I call the momentum lane. You're making money in most months. Your tax bill starting to feel heavy.That's when we start running the S Corporation numbers and look under the hood and say, will this work for you? But again, it's a not a one size fits all. We've got to look at your particular business. Here's lane three, what I call the real business lane.This is where you've got profit, not just revenue. You've got bottom line profit. You've built systems. You have an accounting system. You're ready for payroll and structure.And here's where an S corporation can save you some serious money. So now you're back to asking, Ralph, what am I doing? An LLC or an S corp? No, the question is, which lane are you in right now? Are you in lane one?Are you in lane two? Are you in lane three? Let's make this simple, because the question isn't which one is better. The question is this, which one fits you right now?Based on your income based on your consistency. Yes, your profit and your readiness. Here's a decision process I use with creators every single week. You ready for this? Step one.Look at your real numbers. This first question is this. How much did your content actually pay you last year? I'm talking about actually paying you.Not views, not followers, not potential. I'm talking about real bank deposits, real bucks in the account. Because the IRS doesn't tax viral, they tax income. Here's an example of that.A creator came to me, they made 18,000 bucks last year. They had some sponsorships, some affiliate income, and a few one off gigs.And they're panicking because someone on TikTok said switch to an S corporation immediately. Nope. At that stage the best move is usually llc. And let's get that cleanup. You might be saying, right. Why? Why wouldn't he do that?Because the biggest win isn't S corporation savings yet.The biggest win for this particular person is separating those accounts, keeping the business and the personal separate, putting together some simple bookkeeping, looking for legitimate tax write offs and consistently tracking it. So for this person, the LLC was the best. First lane one, foundation first. Here's step two. Check that consistency.Ask yourself this question, is your creator income steady or spiky? Listen, as a creator, sometimes mine is spiky. Well, if it's spiky, one month is big, two months quiet. An LLC often makes the most sense.But if it's steady, and I hope yours gets to that point, money coming in most months S corporation becomes a real conversation. Because then you've got that consistency, you've got something we can work with. Let me give you another example.A YouTuber I work with was doing about $72,000 a year. He had ad revenue monthly, affiliate income monthly, ran deals every quarter.Now as an llc, they were paying that self employment tax across basically all of it. We mentioned that earlier. So in his case, we did elect that S corporation. We set a reasonable salary. That's another topic for another day.But then the extra profit came out differently. What was the result? We saved him $9,000 for the year. Of course that depends on your real numbers and how much income you have.But the same creator, the same content, less money lighting on fire. We don't want to light your money on fire. Here's step number three. Are you actually profitable? And this one hurts a little bit. But this is the big.I've had so many creators say to me, Ralph, I made $80,000 last year. And I said, okay, but what did you keep for Example, I had One creator made $80,000. You know what their net profit was? 80 bucks. So ask yourself this.Are your real expenses? Are you making real money after what's left?If nothing's left, the S Corporation not going to make you feel like magic because you're not going to be paying any tax as corporation savings comes from profit, not from revenue. So you got to understand, yes, revenue, but what is the bottom line profit, because that's what you pay tax on. Here's a great example of that.A streamer came to me showing $110,000 in income. Now you would think, hey, great, that's an S Corporation time, right? Oh, wait a minute though. We looked a little closer.They were spending money like crazy. They had editors and software and they hey, hey, gear like I've got. They were traveling.They got subscriptions and business meals that weren't business meals. Their profit margin was super thin. So in his case, we didn't rush into an S corp. We fixed the foundation first.We started by tracking those expenses, we tightened those categories, and we plugged the money leaks. We eventually revisited the S Corporation after the business matured, and then it made sense. Let's look at step number four.Are you ready for grown up mode? Now, you think I'm picking on you, right? But let me be real with you. An S Corporation is not scary, but it does require some structure.You've got to think about things like payroll. You've got to take a reasonable salary for yourself. You've got to have clean books.You've got to completely separate the money, business and personal. And you've got to think about consistency. So ask yourself this. Am I ready to run this like a real business, or am I still in creator chaos?And listen, there's nothing wrong with being in creator chaos. But if you want to do this on the business side, we've got to run this like a real business. And this one surprises people.I had a creator making over $150,000 who absolutely could have done an S Corporation. They would have saved a ton of money. But when I looked under the hood, their books were a mess.Business, personal, all mixed together like a big old salad. There was no tracking, no systems. They didn't even know if they were making real profit. So when we sat down, we held off.Because an S Corporation on messy books is like building a second floor on a crooked foundation. That's not going to go well. So we cleaned it up first, then we switched. So ask yourself this honestly. Is your income predictable or hopeful?Because that answer matters more than any structure. And I'm going to tell you something right now.Tell you the moment most creators hire, it's not when they go viral, not when they had that big YouTube hit. It's when they look at their bank account and realize, Ralph, I'm making real money and I've got no idea what I'm supposed to do with it.One creator told me, I feel like I'm successful in the Internet, Ralph, but I am irresponsible in real life. See, that's the gap. And that fix is not shame. It just needs a system. And that's what I do. I build systems behind the content.So let's do a two minute audit together. I want you to answer these questions out loud. Where do your payouts land? And about your PayPal, your Stripe. Is it a personal checking account?If it is, we've got a problem. Ask yourself this. Do you have a separate business account right now? Yes or no? If you don't, we've got a problem. Another question.Can you tell me your profit from last year without guessing? I'm not talking about revenue, I'm talking about bottom line profit. If you can't, we've got a problem. And here's the biggest problem of them all.If you got audited tomorrow, do your expenses look clean? Do you have receipts? Do you have categories? Do you have a business purpose for those? If any of those questions felt uncomfortable, good, I'm glad.That's not failure. That's your signal. And now I know what you might be thinking, Ralph, but I'm not big enough yet or I don't want to spend money on this. Or guess what?You know what, Ralph? I'll deal with this later. Here's what I've seen. Later usually comes when it costs more because later comes with a cleanup. Cleanup on aisle nine.And if you're big enough, then guessing is going to cost you right now. Either way, clarity pays for itself. So here's what I want you to do next. I want you to stop guessing and I want clarity on your numbers.I'm going to encourage you. Go to content creatorsaccountant.com helpme. Again, that's content creatorsaccountant.com helpmes. And when you book, here's what happens.I'm going to sit down with you. We're going to look at your income, we're going to look at your profit and we're going to look at your goals.And we're going to answer one big question. What structure makes sense for you in 2026. Not a pressure, just a plan moving forward.And if this episode helped you slow down, I want to tell you, Renee, that's a win. If it helped you realize you don't need to rush, that's an even bigger win. You're not behind. You didn't miss your chance. You.You're learning something most creators were never taught. And you're doing it at exactly the right time.So I'm going to encourage you right now, subscribe if you want more of this, because this channel exists for one reason. My goal here is to translate taxes into creator language so you can build a real business behind your content. I'm Ralph Estep Jr.I am the content creator's accountant. I'm so happy you join me and I'll see you on the next episode.

I'm a creator on fire Burning up the sky Turning every Knowing the reasons why I gotta be Vision in a voice they can't ignore Every beat I drop just opens the door.