Maximize an S-Corp and Save in Taxes

We help you setup an S-Corp and maximize it's tax reduction potential.

How Taxes Work Before Becoming an S-Corp

Net Profits

You only pay taxes on what you make. You'll take a look at what's left after all your deductions & expenses.

15.3% Self Employment Taxes

The first tax you'll owe are called "self employment taxes", which comprise of social security & medicare tax - only up to the social security limit of about $150,000.

12.4% Social Security Taxes

All income up to the social security limit of about $150,000, is first subject to the 12.4% social security limit, which is what funds social security benefits and determines your benefits when you retire.

2.9% Medicare Taxes

You'll then owe 2.9% medicare tax on all income even above the SS limit.  The medicare tax increases at certain thresholds.

State and Federal Income Taxes

After paying your state and federal income taxes, it "passes through" to your 1040 personal return, where you'll pay federal & state income tax.

S-Corp Case Study: 
$100,000 Net Profit


Net Profits

($50,000 S-Corp Salary)

Social Security Taxes


Medicare Taxes


Total SE Taxes Due


Annual SE Tax Savings


How Taxes work after becoming an S-Corp

Split Your Income in Two

Your income will come in two parts now, a salary that runs through a payroll system and then a dividend as the owner.

Salary = Subject to 15.3% SE Taxes

The salary or wages paid to you from the corporation ARE subject to the 15.3% self employment taxes.

Distribution = NOT subject to 15.3% SE Taxes

The owners distribution will not be subject to social security or the medicare tax.

Must Take a "Reasonable Salary"

Since we'd all like to take NO salary so that we don't pay self employment taxes, the IRS says you must take a "reasonable" salary according to what you do in the business.  You want to maximize this.

Huge Savings

The s-corp can lead to major tax savings, which can help fund the additional staff, services & investment.