A bit of background: I'm working towards building a business selling on Amazon. I've been doing this for less than 2 months, and have less than $200 in sales, whereas I've spent about $700 on this. In other words, there's been no profit yet.
When I first started, I was advised to register as an S-Corp to avoid paying self employment taxes, and for various other reasons as well.
The problem: I'm beginning to think I should have just gone with a Sole Proprietorship. I mean, that's what I am, just one person doing business for herself. The S-Corp requires me to pay myself a wage, have paychecks including income tax, etc, etc.
My question is two-fold. 1. Other than being taxed as self employed vs employed by the company, what are the differences between an SCorp and a Sole Proprietorship, and what are the advantages and disadvantages of each? I know so little about this sort of thing that I don't really even know how to present arguments for and against each side, other than that it seems like Sole Proprietorship seems to be more accurate for what I'm doing.
2. If I do need to switch, I assume that involves dissolving the S-Corp. What do I need to do for that? I'm registered to collect sales tax in three states, though I don't owe anything to any of them. I assume I need to inform them and the federal government. Or, is there some paperwork I can file that just changes the type of my business?
I would dearly love to hire a CPA, but I have extremely limited funds for starting this business, and can't afford one.
Many, many thanks in advance.