Starting a business in South Shore? Thinking about electing S Corp status to reduce your self-employment taxes? Our team helps local entrepreneurs understand their options and get set up correctly from day one.
The entity you choose affects how you're taxed, your personal liability, and how your business operates. We help you choose the right fit.
Simplest structure. No formal setup required but offers no liability protection. All income taxed on your personal return via Schedule C.
Provides personal liability protection while still filing on your personal return. A popular choice for freelancers and self-employed professionals.
Two or more owners with liability protection. Files a partnership return (Form 1065) with K-1s issued to each member.
Can significantly reduce self-employment taxes for profitable businesses. Requires reasonable officer salary, separate payroll, and an annual S Corp return.
An S Corp election allows business owners to split income between a salary and distributions — only the salary portion is subject to self-employment taxes. For profitable businesses this can result in meaningful tax savings.
Generally, an S Corp election starts to make financial sense when net business profit exceeds around $40,000–$50,000 per year. Below that threshold, the added complexity and cost of running payroll may outweigh the savings.
Ralph has helped many South Shore business owners evaluate whether an S Corp election is right for their situation — and when it is, we handle the election, the payroll setup, and the annual filing.
We file the election with the IRS and help you understand the timing and requirements.
We help determine a defensible officer compensation amount that satisfies IRS requirements.
S Corps require payroll for owners. We set that up and keep it running through our payroll service.
Form 1120-S filed each year along with K-1s for each shareholder.
For most new businesses, forming an LLC first makes sense — it provides liability protection and gives you a formal business entity. From there you can evaluate whether an S Corp election is beneficial.
It depends on your profit level. For a business netting $80,000 per year with a $45,000 salary, the savings on self-employment tax could be $4,000–$6,000 annually. Ralph can run the numbers for your specific situation.
To be effective for the current tax year, Form 2553 must generally be filed within 75 days of the start of the tax year. Late elections may be possible in some circumstances.
Yes — S Corp owners who work in the business must receive a reasonable salary subject to payroll taxes. This is a firm IRS requirement and a common audit trigger if ignored.
Start your secure intake online or call our Ruskin office.