Sole Proprietorship vs. S-Corps for Taxes

Get the Most Tax Benefit Possible from an S-Corp

S-CORP

could be the most powerful tax tool available.

In most cases, an S-Corp is able to save dramatically in taxes.

We can determine if an S-Corp is right for you.
We can convert you to an S-Corp & build a perfect tax plan.
We will pay in your taxes through the payroll system & provide guidance on the reasonable salary.
We will file your 1120S tax returns at the end of the year and make sure you're compliant.

DATA

BEFORE

AFTER

NET PROFITS

$100,000

$100,000
($50,000 S-Corp Salary)

SOCIAL SECURITY TAXES

$12,400
12.4 %

$6,200
12.4 %

MEDICARE TAXES

$2,800
2.8 %

$1,400
2.8 %

TOTAL SE TAXES

$15,300

$7,650

ANNUAL SE TAX SAVINGS

$7,650 y/r

LLC VS. S-CORP
FOR SMALL BUSINESS

15.3% SELF
EMPLOYMENT TAXES

S-Corps are used to mitigate your self employment taxes, which are comprised of your social security and medicare taxes.

HOW IS A SOL
PROP TAXED?

Out of the gate, you are taxed as a sole proprietorship, which means you’re 100% subject to self employment taxes.

HOW IS AN
S-CORP TAXED?

S-Corps are different because you get income in two manners, your corporation will pay you a salary, and you’ll take distributions as the owner. The payroll is subject to the 15.3% SE tax, while the distribution is not subject to the SE taxes.

MAXIMIZING
THE S-CORP

You’ll need to work to maximize the tax benefits of an S-Corp, while obeying the IRS law and case law. Your business must pay you a “reasonable salary”, and we help you determine that.