MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

When to Convert your LLC into an Scorp

19 Feb 2026 · 1 min

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Mark Kohler advises side-hustlers to start with an LLC rather than immediately electing S-Corp status. Since S-Corp elections can be backdated to January 1 but not before the LLC forms, starting as an LLC gives you flexibility to convert later when income justifies it. About 50 million Americans have side-hustles.

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There's 50 million Americans now with a side hustle. So a client walks in, they have a side hustle and a day job and maybe a day job, 401k, maybe a little Roth IRA over here, and they're off to the races. There's a revocable living Trust and they're 1040, but they have a side hustle. I'm going to ask them, how's it going? How much are you making? Oh, 20 grand. 30 grand. 40 grand. I'll go. What's your plans for next year? Oh, I'm going to blow it up. I'm getting ready to go big. Okay. What I want to do is make them an llc, right? Then I'm not going to make an Ms. Corp right away because I don't know how their year is going to turn out or next year. But I can always back date to the first of the year because the LLC acts like S Corp insurance. But in the year I set up the llc, I can only backdate to the date the LLC was formed. Then I convert to the S Corp when the time is right. So every side hustle business, I really like to be in an LLC format and then we'll convert them over later.