S Corporation?

Dave gives Joe three instances in which it's a good idea to set up an S Corp for a small business.

QUESTION: Joe has been advised to set up an S corporation for his business.  Is that a good idea?

ANSWER: The only benefit of setting up an S corporation is that you set up a corporate veil that will protect you from lawsuits.  The S corp used to be the only way you could claim a tax deduction as a sole proprietor.  Now you can claim the tax deduction without setting up an S corp.  There is currently no tax advantage to an S corp. 

The only times you should set up an S corp are:
•    if you have substantial personal assets,
•    your business is booming,
•    or you have a business that lends itself to frivolous lawsuits.