What is an S-Corp?
S-Corp’s are pass through entities meaning that income and losses pass through to their shareholders (owners) for tax purposes. Shareholders report the income and losses of the business on their personal tax returns so they AVOID double taxation.
Is an S-Corp right for my business?
S-Corp’s are great to form when your business has employees or contractors. Many of our small business clients form as an S-Corp.
Are there TAX BENEFITS to running your business as an S-Corp?
YES, the shareholders (owners) will save 15.3% in payroll taxes. That’s huge!
How do I set up my S-Corp to take advantage of these tax benefits?
1. You need to pay yourself a reasonable salary. A reasonable salary is the amount you think you should be paid based off the how much work you do in the business
2. You pay yourself profit distributions which is where you are NOT taxed on payroll taxes.
If you have questions on this, feel free to reach out to our team, we’re happy to help.