Thanks for your interest. I've added some answers, Carl.
Why are you considering filing the entity reclassification to be classified as an S-Corp? I assume you already know that a corporation is taxed at a higher rate than a disregarded entity.
I have a "bird in hand" opportunity from a staffing agency. Their Independent Contractor agreement excludes LLCs, sole proprietors, or "any disregarded entity". This seems to be a trend in the staffing industry.
What does your business do?
Write software and design platforms and user experiences.
" As a freelancer, I'd like to support as many types of compensation as possible."
Exactly what do you mean by "support" as many types of compensation as possible?
"support" = "accept". When I have an opportunity or I'm marketing my services, I don't want barriers to landing a contract or accepting income.
Does your business have employees?
No. Single member LLC
Overall, I get the impression that some tax professional (like a CPA) is trying to talk you into doing something that may not benefit you, but will put more money in their pocket.
Exactly right, except it's "some staffing professional" or rather a talent agency's entrenched policy.
When one elects to have a disregarded entity treated "like an S-Corp", that's for tax purposes *ONLY* and absolutely nothing else. It will afford you absolutely no protection what-so-ever of your personal assets, should a client have reason to sue you. Remember, the 8332 or 2553 is for tax purposes *ONLY* and nothing else.
I agree. protection of my personal assets comes from being a "limited liability company" and carrying large and varied insurance policies. The latter (a COI - Certificate of Insurance) was required by a former client, and is a common requirement for software contract work.
