Brand new LLC what tax classification do I choose?

[Christina Gomez]

Hello my name is Christina Gomez, I just bought a home on the Big Island of Hawaii. I am starting a vacation Rental where I will be living full time. I have already applied for my LLC and in the process of getting me state tax license and ID. I am not sure what classification to put my business under. I heard if I File as a pass through entity that my self employment taxes are very high. I also read that putting it into a C-Corporation I could pay myself and pay cheaper taxes that way, but I would be paying double taxes. I am sure this question is for a tax professional but if anyone has an insight or the experience with this question, Any info would be greatly appreciated. Should I just stay with a pass through entity and pay my taxes quarterly?

[Christopher Brainard]

Hi Christina and Welcome to BP!

You should use the entity that your CPA tells you to use :) 

I'm almost certain that you shouldn't use a C Corp and that you should use a S Corp or LLC, depending on your personal financial situation and how much potential profit your vacation rental is going to earn. If you're worried about self employment taxes and have significant net income, S Corp is probably the way to go and you can even setup a solo 401k to stash cash.

-Christopher