LLCs vs S corps: Income and Tax Differences: These income and tax questions are frequently asked when individuals and partners contemplate forming a new company. Basically, am I better off with an S-corp or an LLC? There are several non-financial benefits (which I lean toward) in favor of the LLC over the S-corp, particularly the LLCs structural flexibility. Many articles and blogs have been written about that subject and I will link to some of the good ones later. For now, I wanted to address some of the more ambiguous questions about the two legal entities impacting the entity decision, namely whether the choice makes a basic tax difference for the principal owners.