Pay yourself smarter, once you're profitable.

For an existing entity, generally within two months and fifteen days after the start of the tax year you want it to take effect, which is about mid-March for a calendar-year business. A new entity has the same window measured from formation. Miss it and you usually wait until next year, unless you qualify for late-election relief. We file inside the window so timing is not what costs you the savings.

It reduces self-employment tax. Instead of all profit being subject to that tax, you pay yourself a reasonable salary and take the rest as distributions that avoid it. The saving grows with profit, which is why it only pays off above a certain income, once the added payroll and filing costs are covered. This is general information, not tax advice, so we model it against your actual numbers before you elect.

Typically once net profit is high enough that the self-employment tax saved outweighs the added payroll service and a second tax return, often in the low-to-mid five figures of profit and up. It fits an owner taking a steady income, not a business reinvesting everything or planning a venture raise. We run the threshold for your situation before you elect rather than after, so the decision is based on your numbers.

The IRS requires an S-corp owner-employee to pay themselves a reasonable wage, what a comparable business would pay for the same work, before taking any distributions. Set it too low to dodge tax and you invite an audit and reclassification; set it sensibly and the distributions are legitimately free of self-employment tax. Getting this number right is the core of running an S-corp correctly, and we help you support it.

Yes. A single-member LLC can elect S-corp taxation while staying an LLC; you do not convert to a corporation. The owner becomes an employee paid a reasonable salary, with the rest taken as distributions. It is one of the most common setups for a profitable solo business, and we handle the election without changing your underlying entity type.

No. The S-corp election only changes how the business is taxed, not what it legally is. Your LLC stays an LLC and your corporation stays a corporation; the entity, its name, and its EIN are unchanged. What changes is the tax treatment and the obligations that come with it, such as running payroll and filing an 1120-S.

Three main ones: you have to run payroll for your reasonable salary, file a separate 1120-S return each year, and keep clean books that separate salary from distributions. They are the reason the election does not fit every business, and the reason we line up payroll, bookkeeping, and a compliance calendar alongside the filing so the savings are not eaten by a missed deadline.