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The LLC-versus-S-corp question comes up for almost every growing business, and the right answer depends on numbers most owners have not run. This primer makes the trade-offs concrete.
It explains what an S-corp election does, when the tax savings outweigh the added cost, and what the IRS expects in return.
What's Inside
- ✓What an S-corp election actually changes (and what it does not)
- ✓The reasonable-salary requirement, explained plainly
- ✓A worked example of the self-employment tax savings
- ✓The added costs: payroll, a separate return, more bookkeeping
- ✓A rough profit threshold where the election tends to pay off
How to Use It
- 1 Read the worked example with your own profit number in mind.
- 2 Estimate your reasonable salary for the work you do.
- 3 Talk with us before electing; timing and payroll setup matter.
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Request This ResourceThese templates and guides are general educational resources, not tax, legal, or accounting advice. Your circumstances may differ, talk with us before acting on them.