Can S-Corp save me money?

Choosing a business entity has major tax implications for your business.

A great option for the "business-of-one" is to file as an S-Corp.

70,000

Estimated yearly income

35,000

Salary you would pay yourself as an S-corp

Taxes owed with an LLC or sole-proprietorship

10,700

Taxes owed with an S-corp

5,400

5,400

Potential Tax Savings by switching to an Scorp

What is an S Corporation (S-Corp)?

An S corp or S corporation is a business structure that is permitted under the tax code to pass its taxable income, credits, deductions, and losses directly to its shareholders. 

Where do these tax savings come from?

As an LLC, you pay employment tax on the entirety of your income. When filing as an S-Corp, you only pay this on the salary you draw. The remainder of your profit is taxed as a distribution, which is often a tax advantage.

What should I know?
  • State tax laws vary considerably, and this can have an impact on your decision.

  • Your filing status, type of business, and other sources of income affect the amount owed

  • Like most other business entities, there are some costs incurred for setup and payroll

  • A tax professional can easily help you understand exactly how much you will save

How do I switch?
  • A professional can help you evaluate your unique business to determine if an S-Corp is right for you

  • Switching can be easy and quick

  • Nia has partnered with Formations to help ensure you maximize your tax savings

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Formations helps the self-employed maximize their financial potential and increase their take-home pay by removing the guesswork from managing their business finances. By following the Formations playbook and leveraging our technology, our customers average over $11K in tax savings and contribute over $18K towards retirement annually, putting them on target to save an additional $1.5 million by the time they retire.