We help Sole Proprietors and LLCs convert to S Corporations.
Learn how to become a S-corp! We help Sole Proprietors and LLCs convert to S Corporations. Learn how to form an S Corp with our easy process. Start an S Corp the right way. Setup a S Corp. Learn how to file for S Corp.
Wondering lately, “Should I be an S Corp?”
If you're not sure where to start, what's all involved, or if it's a good idea for your business, you're in the right place!
We specialize in helping online, service-based businesses… and we don't like surprising people.
Read everything below to learn the expectations the IRS will have of you as an S Corp.
the 4 core responsibilities of an S-corp
S Corps pay their business owners through a salary which means you'll need to run payroll software. You'll get a paycheck & W2 from your business, just like a job.
Choosing the correct salary amount is critical since the IRS is very picky about this and will penalize you if it's not reasonable.
Taxes double… literally. Your accountant will now file two tax returns for you: one business and one personal. Each return has different due dates and tax requirements.
You'll also start paying taxes on your own paychecks, just like an employer.
This might actually require the biggest change. Many sole proprietors do their own bookkeeping but once you're an S Corporation, the books must be kept in double-entry bookkeeping software. No more spreadsheets.
You're legally required to keep a Balance Sheet.
Each year, you'll be expected to renew & file:
Annual reports, meeting minutes, state registration fees, state imposed taxes, Registered Agent service, plus any necessary state permits
What an S Corp actually is:
An S Corp is an LLC business structure. It's an LLC that elected to be taxed as a corporation.
So the “S Corp” is not its own business structure. S Corp simply indicates how a business is taxed… as a Subchapter Corporation.
Your state will recognize your business as an LLC.
It's the IRS that will recognize your business as an S Corp. It's the IRS that determines your tax savings!
the potential tax savings
As a sole proprietor, all the profits your business makes are taxable. That means all profits are subject to self employment tax.
If you make $100k profit, you're going to pay 15.3% taxes on it… so you lose $15,300 to the IRS automatically.
S Corps divide their profits. Part goes to the business owner's salary and part goes to the company's dividends. ONLY the salary is subject to the 15.3% self employment tax.
If you make 100k profit, but elect 45k to be salary, you'll only pay that 15.3% tax on 45k (not 100k like before).
So the IRS only receives $6,885 in SE taxes, saving you over $8k.
The Pros of S Corps
- The business pays less in self employment taxes
- The business owner is much more protected from lawsuits
- The business still exists even if the owner passes away
The Cons of S Corps
- The salary you take is now subject to payroll taxes
- The accounting and legal fees are higher
- The IRS expects a greater level of responsibility from you so bookkeeping, annual filing, and taxes need to be legit
you're eligible for s corp status when…
You own the business as an individual. The business owners of the S Corp must be “allowable shareholders”, so no partnerships, corporations, or illegal US citizens can own it.
You don't plan to have more than 100 shareholders or more than one class of stock if your company is publicly held.
Your business operates in the United States. You may do business with customers outside the US, but your business homebase is domestic.
You're making much more money than you're spending (or plan to be making more money within the next 12 months). The point of an S Corp is to save your profits from taxes.
Stop donating to the IRS
In case you're wondering….. YEAH!
It's all worth the hassle when it saves you thousands.
Let's figure out what you would save with a quick financial review.
The preliminary process
Fill out the form.
In order to do a review, we need to see your tax return and bookkeeping info. The form will ask you for that information.
Book the consult.
During our 30 min video call, we'll review your biz financials together and determine if you're ready to incorporate. ($100)
Sign the contract.
The contract is a friendly commitment. We want you to succeed and filing an S Corp requires both of us.
The ultimate s corp filing
After signing the contract,
expect to receive:
Accurate filing of your S Corp with the IRS
Reasonable salary calculation for payroll
Two 30 minute video calls with Melissa
Payroll setup & an Accountable Plan
Corporate Bylaws template
90 days of email support
Access to our partner bookkeeping services
Access to our tax services
Our service covers all four bases, we'll never leave you guessing.
Roll up those sleeves!
We only take on clients who are ready to commit to the four core responsibilities.
The nitty gritty
With our help…
Incorporating is not a hands-off process. We'll need your participation with the following activities:
Attending both meetings online with Melissa
Filling out S Corp paperwork
Filling out legal doc templates
Registering with your state as an employer
Digging into online payroll software
If you'd like us to do your taxes, we'll set you up with a tax plan and a bookkeeper
Just a heads up:
Once forms are submitted to the IRS, it takes up to 10 weeks to receive an approval
If you're not up to date with your bookkeeping, that will need to be caught up first
There are some businesses we can't take on as clients; we specialize in online, service-based businesses
We do not offer this service during the tax season
We do not do S Corp conversions for nonprofits
S Corp Costs:
One time filing fees:
Our setup fee
Our Ultimate S Corp Conversion service is $570
LLC formation fees
If you're already an LLC, you can ignore this section.
Being an LLC is necessary to be an S Corp.
If you're not an LLC yet, no problem! We'll help you go through our favorite legal service for the easiest, cheapest, and quickest filing possible.
(You can click the State List below to see what you'd pay)
This list pertains to the LLC formation service mentioned above. You can find the total cost below, next to your state.
Alabama – $312
Alaska – $399
Arizona – $244
Arkansas – $199
California – $249
Colorado – $199
Connecticut – $399
Delaware – $238
Florida – $219
Georgia – $249
Hawaii – $199
Idaho – $249
Illinois – $328
Indiana – $247
Iowa – $199
Kansas – $229
Kentucky – $199
Louisiana – $224
Maine – $294
Maryland – $367
Massachusetts – $414
Michigan – $209
Minnesota – $304
Mississippi – $202
Missouri – $208
Montana – $219
Nebraska – $216
Nevada – $874
New Hampshire – $314
New Jersey – $279
New Mexico – $249
New York – $279
North Carolina – $276
North Dakota – $249
Ohio – $249
Oklahoma – $201
Oregon – $249
Pennsylvania – $274
Rhode Island – $387
South Carolina – $459
South Dakota – $299
Tennessee – $257
Texas – $449
Utah – $225
Vermont – $274
Virginia – $224
Washington – $349
Washington DC – $369
West Virginia – $284
Wisconsin – $249
Wyoming – $251
it's more than just filing to us
We provide all the services we would want for ourselves.
We care about you succeeding after you file too!
S Corp finances have a lot of moving pieces. You need an advisor who understands them and helps you navigate.
“I think of my clients like family.”
Time to get started!
What is an S Corp?
Read this article to gain a clearer understanding. =)
Should I become an LLC before working with you?
That is ideal but not necessary.
What happens if I become an S Corp and then decide to change back?
If you change back into an Sole Proprietorship after becoming an S Corp, you won't be able to be an S Corp again for five years.
What if I only need the filing done, not all that other stuff?
We advise going through an automated site like legalzoom.com if that's the case.
We don't limit the service to filing alone in good conscience. We also won't be able to take you on as a tax client.
Does your one-time setup fee include the Preliminary Consult?
No it does not. The consult is a stand alone service. You'll receive valuable information during the consult so even if you're not advised to become an S Corp immediately, you'll have a good idea of what numbers you need to hit in order to pursue an S Corp conversion at a later date.