Could an S-corp cut your tax bill?

An S-corporation isn't a different business — it's a tax election that can dramatically reduce what profitable owners pay in self-employment tax. But it only works when it's set up and run correctly: a reasonable salary, proper payroll, and a clean Form 1120-S. We handle all of it.

How the S-corp saving works

As a sole proprietor or LLC, your full profit is subject to ~15.3% self-employment tax. As an S-corp, you pay yourself a reasonable salary (subject to payroll taxes) and take the remaining profit as distributions (which are not). For many owners netting $80k+ in profit, that difference is real money — often several thousand dollars a year.

What we do

• Run a break-even analysis to see whether an S-corp actually saves you money
• File the S-corp election (Form 2553) — including late-election relief where eligible
• Set a defensible reasonable salary and run compliant payroll
• Prepare and e-file the S-corp return (Form 1120-S) and owner K-1s
• Keep your books and distributions clean year-round

The catch most people miss

The IRS requires S-corp owners to take a reasonable salary before distributions. Pay yourself too little and you invite an audit; too much and you give up the savings. Getting that number right — and documenting it — is exactly where a good accountant earns their fee.

Common questions

When should I elect?

Elections are time-sensitive (generally within 75 days of formation or the start of the tax year), though late-election relief is often available. Talk to us before year-end to plan it properly.

What does the return cost?

Business year-end taxes start at $1,950 ($2,350 with a partner). See the full pricing. We quote every engagement up front.