The title is kinda self-explanatory, but I was wondering what kind of business set up is best for someone working full time as a w-2/consultant in a hospital/someone else's practice and also part time in their own private practice (eventually 100% private).

Also, would it be recommended that I get a "business" credit card to keep all expenses easily "provable" and 'trackable'? Would I be able to use a personal credit card for business expenses?

Zip Code: 08831

If you work as an employee, and also do some consulting on the side, I think the Single Member LLC is the best choice of entity. With a Single Member LLC, you generally get similar liabiity protection as with an S-Corp, but it is a disregarded entity for tax purposes.

The problem with an S-corp is the extra social security taxes you'll end up paying. That's because you need to pay yourself a "reasonable salary" through the corporation.

So let's say that you pay yourself $50k through your S-Corp. You'll be required to withhold social security taxes at a rate of 6.2% on that income, and then your corporation matches any social security taxes withheld. Assuming your other job puts you over the social security max ($102k in 2008), you'll get back the social security taxes withheld from your pay by your S-corp. You DON'T get back the match, however.

On $50k of salary, that's $3,100 of social security taxes that you would not have paid if you set up your business as a Single Member LLC.

I wrote about this exact situation, called To Incorporate or Not to Incorporate, available at: http://www.mdtaxes.com/news0705.html.

You should also ask your attorney which type entity he or she recomends with respect to asset protection.

And for the credit card, you can use a personal credit card. Just make sure to charge only business expenses on that card, and pay the monthly bill out of your business account. The IRS does not like when people comingle business expenses with personal expenses.

Zip Code: 01801