How Small Business Owners Can Save Thousands by Becoming an S Corp

If you're a freelancer, consultant, or small business owner still operating as an LLC or sole proprietor, you might be leaving serious money on the table.

The good news? There's a smarter, IRS-approved way to structure your business—and it could save you thousands in taxes every year. It’s called electing S Corporation (S Corp) status, and it’s one of the most powerful tax strategies for the self-employed.

Let’s break down what it is, why it works, and how we makes the switch simple.

What Is an S Corporation (S Corp), Exactly?

An S Corporation isn’t a new type of business—it’s a tax classification you can elect for your existing LLC or sole proprietorship.

When you become an S Corp, the IRS allows you to split your business income into two parts:

• Wages (which are taxed for Social Security and Medicare), and

• Distributions (which are not subject to self-employment tax).

This one change can significantly reduce your tax bill—especially if you're making $60K or more in business profit annually.

Real-World Example: S Corp vs. Sole Proprietor

Let’s say your business makes $100,000/year.

As a sole proprietor, you’d owe 15.3% in self-employment taxes on the entire amount—that’s over $15,000.

But as an S Corp? If you take a reasonable salary of $40,000 and the rest as a distribution, you’d only owe self-employment taxes on the salary—saving you around $9,180 in taxes.

That’s money you could reinvest in your business—or take home.

When Does Electing S Corp Status Make Sense?

Generally, switching to an S Corp is worth considering if:

• Your business is netting at least $60,000 a year

• You’re paying too much in self-employment taxes

• You want to run a more tax-efficient and legit operation

• You're planning to scale or bring on team members

What to Watch Out For (And How We Help)

The IRS requires you to pay yourself a “reasonable salary,” set up payroll, and follow S Corp compliance rules. That’s where we come in.

We handle:

• Your S Corp setup (federal + state)

• Backdating filings for retroactive tax savings

• Payroll setup + tax withholding

• Ongoing compliance and support

We even calculate your estimated tax savings before you commit.

Make the Switch. Start Saving.

We’ve helped countless small business owners make the S Corp transition and save big on taxes—with no guesswork, no hourly fees, and full support along the way.

Don’t wait until tax season to start saving.

👉 Schedule a Call to see if an S Corp is right for you.

Let’s put your hard-earned money back where it belongs—in your business, and in your pocket.