What we help with
- Entity and tax classification review. Sole proprietor, partnership or S corporation: which fits your business now and as it grows.
- S corporation analysis and election. We model your numbers and prepare Form 2553 if the election makes sense.
- Estimated-tax planning. What to set aside, how much to pay each quarter and when, to avoid penalties and surprises.
- Bookkeeping set-up guidance. Clean books from day one make everything else easier.
- Year-end tax planning. Decisions that need to happen before December 31, not after.
When does an S corporation election make sense?
As a sole proprietor or single-member LLC, you pay self-employment tax of 15.3% on net earnings, up to the Social Security wage base. An S corporation election can reduce that by letting you pay yourself a reasonable salary and take the rest of your profit as distributions. It also adds payroll, a separate tax return and other costs. It often becomes worth modeling once net profit is consistently in the range of roughly $50,000 to $60,000 or more, but that is a rule of thumb, not a rule. Our LLC vs. S corp guide explains it with an example.
Our approach
- Gather your numbers. Income, expenses, owners and goals.
- Model your options. A side-by-side comparison, with costs included, in plain language.
- Recommend and implement. We prepare the elections and filings that need to happen.
- Review regularly. Your best structure changes as your business does.
Ways to work with us
A 30-minute tax consultation is $60. If you want us to prepare the return too, see tax preparation. If you want regular planning, the Complete plan for bookkeeping and payroll includes quarterly estimated taxes and a quarterly strategy call.
Works alongside your accountant
Already have an accountant or bookkeeper? We are happy to work with them. We focus on structure and planning, the decisions that happen before a return is filed.
Questions
Q01How is this different from my accountant?
Many accountants focus on preparing the return after the year ends. Tax planning focuses on structure and decisions before it ends, such as entity choice, an S corporation election, estimated payments and year-end moves. We can work alongside your current accountant.
Q02When should I elect S corporation status?
It depends on your net profit, how much a reasonable salary would be for your work, and the added cost of payroll and an extra tax return. Many owners start evaluating it when net profit is consistently around $50,000 to $60,000 or more. A 30-minute consultation is a good place to run your numbers.
Q03What do you need from me to get started?
A rough picture of your income and expenses, whether you have partners or employees, and your most recent tax return if you have one. If you are brand new, just your plans and goals.
Q04Is there a deadline to elect S corporation status?
Generally, Form 2553 must be filed within two months and 15 days after the beginning of the tax year the election is to take effect, with late-election relief available in some cases. Timing matters, so it is best to ask early.
This page is general information, not legal advice. We do not represent clients before the IRS or any other government agency. The IRS does not endorse any particular individual tax return preparer. For more information on tax return preparers, go to IRS.gov.