LLC vs. S-Corp in NJ | Taxes, Payroll & Paperwork Explained

LLC vs S-Corp NJ — Choosing the Right Entity

If you’re starting or restructuring your business, understanding the LLC vs S-Corp NJ difference is critical. Each structure affects how you pay taxes, handle payroll, and file paperwork.

Step 1: How LLCs Are Taxed in NJ

By default, an LLC is a pass-through entity — profits flow to your personal return and are taxed at your individual rate. You’ll pay self-employment tax on your net income, including Social Security and Medicare.

Step 2: How S-Corps Are Taxed

An S-Corp allows you to pay yourself a reasonable W-2 salary, then take the remaining profits as distributions, potentially reducing self-employment taxes.

Our tax advisory team helps determine if this move makes sense for your income level.

Step 3: Payroll & Paperwork Differences

S-Corps require payroll filings (W-2s, 941s, NJ WR-30), while LLCs do not. You’ll also need to maintain corporate minutes and file annual reports with the NJ Division of Revenue.

CPA Tip:

Switching from LLC to S-Corp can save thousands in taxes — but timing matters. Consult your CPA advisor before filing IRS Form 2553.

Choose the Right Entity

Book a Free Consultation → with Gregory Monaco, CPA LLC for a custom analysis of your LLC vs S-Corp NJ scenario and year-round tax strategy that fits your business goals.