Choosing the correct corporate structure dictates how your operational income is taxed. The LLC versus S-Corp debate is one of the most critical decisions for a business owner.
A standard LLC is a disregarded entity. All profit flows through to your personal return and is subject to the hefty 15.3% self-employment tax.
By electing S-Corp status via Form 2553, you bifurcate income into a W-2 salary and a shareholder distribution. The distribution is completely free of self-employment tax, often saving business owners thousands annually.
We handle formal S-Corp tax elections and initial architectural setups.
View Entity ServicesStingley CPA - the United States Based Certified Public Accountants
Yes, generally an S-Corp election can save thousands in self-employment tax by allowing the owner to split their income into a "reasonable salary" and a shareholder distribution.
Reasonable compensation is what an organization would pay an independent party for the exact same services. We utilize industry standards to set an IRS-defensible salary.
No, an S-Corp is merely a tax designation granted by the IRS (Form 2553). Your business retains its underlying LLC legal structure and state liability protections.
