The LLC plan is best for landlords or early stage vacation rental owners who haven't crossed a certain annual revenue threshold. The S Corp plan is for established vacation rental business owners who have passed the threshold and/or have a team (employee or contractor).

Not sure which applies? We're happy to assist you! Give us a call at (833) 428-3057 or email us at support@incomecareunit.com

Our pricing includes all the core services listed in each plan: business formation, bookkeeping, financial reports, tax preparation, rental banking with rental collection, and client support. Payroll is included on the S Corp plan for the owner as well as 1 employee OR contractor. Additional fees apply: $15 per additional employee per month, and $5 per contractor per month when payroll is run for them. Individual tax return filing for LLC's are an add-on and priced separately with a 15% discount.

LANDLORDS

For a traditional landlord, an LLC creates a legal separation between you and your rental property. Meaning if a tenant sues over a slip and fall, a habitability dispute, or a security deposit disagreement, your personal assets like your primary home, personal savings, and personal vehicle are not automatically on the table. Your liability stays inside the business where it belongs. A dedicated business bank account reinforces that separation and keeps your rental income and expenses completely separate from your personal finances, which matters enormously at tax time when you need to prove that your deductions are legitimate business expenses and not personal spending that got mixed in.

FURNISHED APARTMENTS

For a furnished rental operator, the LLC and business bank account become even more important because mid-term rentals often involve corporate tenants, traveling nurses, or relocation clients who expect to sign a lease with a business entity not an individual. It adds professionalism and credibility to your operation, and it keeps the furnished rental income clearly separated from your personal income so your bookkeeper and tax professional are not untangling your finances every quarter. Many furnished rental operators also carry higher-value furniture and appliances inside their units, and an LLC helps ensure that liability related to those assets stays contained.

AIRBNB HOST

For a vacation rental host, the stakes are particularly high because short-term rental platforms, local regulations, and guest interactions all create exposure that a sole proprietor is not adequately protected from. A guest injury, a property damage dispute, or a regulatory fine can escalate quickly, and without an LLC standing between you and that liability, it becomes a personal financial problem fast. The business bank account also becomes critical for STR hosts because platforms like Airbnb and VRBO pay out frequently and in varying amounts. Without a dedicated account, that income disappears into your personal spending before you ever set aside what you owe in taxes.

FUNDING

And if you need business funding, both are required!

LANDLORDS

For a traditional landlord, the S-Corp election is worth examining carefully because the answer is not always yes. Pure rental income is generally considered passive and is not subject to self-employment tax on its own, so the primary tax advantage of an S-Corp (avoiding self-employment tax on a portion of your income) may not apply in the same way it does for an active business. However, if your rental operation has grown to the point where you are performing significant management services, working with multiple properties, or running associated services like property management for others, the S-Corp election can create a meaningful structure for separating your active income from your passive rental income and reducing your overall tax burden. This is a conversation worth having with your tax professional before you elect.

FURNISHED RENTALS

For a furnished rental operator, the S-Corp election tends to make more sense earlier in the journey because mid-term rentals often require active management (tenant screening, lease coordination, unit turnover, maintenance oversight) that looks and functions more like an active business than passive landlording. When your net profit from the furnished rental operation reaches a level where self-employment tax becomes significant, electing S-Corp status and paying yourself a reasonable salary through payroll allows the remaining profit to pass through to you without that additional tax layer on top. The payroll requirement is real overhead, but at the right income level the tax savings outpace the cost of running it.

VACATION RENTALS

For a vacation rental host, the S-Corp election is often the most immediately relevant of the three because STR hosts who are materially participating in their rentals (which most active Airbnb and VRBO hosts are) are operating what the IRS effectively treats as an active business. That active business income can be subject to self-employment tax, and once your net STR profit is consistently strong, the S-Corp structure lets you pay yourself a reasonable salary, run that salary through payroll correctly, and take the remaining profit as a distribution that is not subject to self-employment tax. The savings at scale are substantial. The structure also signals to lenders, partners, and future investors that your vacation rental operation is a real business, not a side hustle.

Of course. We make it easy to switch during your kickoff call included in both plans. If you're already using Gusto as your payroll provider we've got you covered!