What's An S-Corp & Should You Start One? | Tax University скачать в хорошем качестве

What's An S-Corp & Should You Start One? | Tax University

What's an s corp and should I start one? You may be asking yourself this question if you're self-employed and making a decent profit (at least $60,000). If either of those apply to you, then an S-Corp could save you thousands in taxes. Let's break it down in under 4 minutes! Welcome to Tax University, brought to you by Keeper, where we break down all the tax information you should have learned in school, so you can take control of your taxes and file confidently! Chapters: 0:00 Intro 0:31 What's An S-Corp? 0:37 Why Do S-Corps Matter? 0:56 How Does An S-Corp Save You Money? 1:51 Is An S-Corp Right For You? 2:06 How To Set Up An S-Corp (Step-By-Step Guide) 2:26 How To Pay Yourself A Reasonable Salary 2:48 How To Get Free Advice From S-Corp Expert 3:05 Outro So what is an S-Corp? It's a special tax status you can elect with the IRS to save money on your self-employment taxes. Why does this matter? When you're self-employed, say a freelancer or an LLC owner, you pay a 15.3% self-employment tax on ALL your business profit. And that’s ON TOP of your regular income tax. That means if your business makes $100,000 in net profit, you’re paying $15,300 in self-employment taxes ALONE. That' where an S-Corp can help: An S-Corp let's you split your income in 2 parts: 1. A salary which gets taxed normally, meaning it's subject to a 15.3% payroll tax. *However, most people also don’t know that 50% of this payroll tax is actually tax deductible as an S-Corp* 2. A distribution, this is NOT subject to that 15.3% payroll tax. To better understand the tax savings, let’s look at this example: As an S-Corp, if your business made $100,000 in net profit, you would pay yourself: 1. A $50,000 salary, which is taxed normally 2. And take the leftover $50,000 as a distribution, which won't be hit those taxes. That means you ONLY pay self-employed taxes on your salary = $7,650. But because 50% of your payroll tax is deductible as an S-Corp, you only pay $3,825 in self-employed taxes! That’s over $11,000 in tax savings. JUST by switching how you're taxed! Now all of that sounds great, but how do you know if starting an S-Corp is right for you? If you're: 1. Self-employed or an LLC owner 2. Making $60,000 or more in net profit per year 3. Want to lower your self-employment taxes 4. Ok with doing a little more admin like running payroll Then congrats! Starting an S-Corp could be a great fit! Here’s a step-by-step guide on how to start an S-Corp: 1. Register your business: Decide whether you want to form an LLC or Corporation 2. Get an employer ID number: You can do this for free online at IRS.gov 3. File IRS form 2553: To elect s-corp status 4. Set up payroll to pay yourself a reasonable salary: The IRS has strict rules about what counts as a “reasonable” salary. Often times they'll ask for proof as to how you came to that number. Here's a Keeper guide on how to choose a defensible, reasonable salary: https://www.keepertax.com/posts/how-t... Once you do this, you can easily set up payroll with sites like Gusto, ADP, Quickbooks Payroll, etc. 5. Stay IRS compliant: With bookkeeping, quarterly taxes, and annual filings. That’s it! However, it’s important to note that setting up an S-Corp is easier said than done. That’s why you should always consult a tax expert for advice. Keeper provides FREE S-Corp consultations with licensed tax professionals. You’ll get your questions answered and a plan of action started all for free! Book a free consultation here: https://form.typeform.com/to/IeAR9puu... Learn more about Keeper's S-Corp formation and filing: https://www.keepertax.com/lp/icp-s-corp Learn more about if an S-Corp if right for you: https://keeper-web.webflow.io/article... Calculate your S-Corp tax savings here: https://www.keepertax.com/lp/g/s-corp... If you have any questions, drop them in the comments below and we’ll answer them! If this video was helpful, hit the like button and click the subscribe button on the screen for more tax tips! Thanks for watching and see you on the next episode of Tax University! #SCorp #SCorpTaxes #WhatIsAnSCorp #SCorpBenefits #SCorpFormation #SCorpElection #SCorpSavings #SCorpSetup #ReasonableSalary #SelfEmploymentTax #SelfEmployedTaxes #LLCvSCorp #TaxSavingsTips #SaveOnTaxes #TaxPlanning2025 #IRSHelp #BusinessTaxes #TaxTipsForFreelancers #SmallBusinessTaxes #FreelancerTaxes #SideHustleTaxes #EntrepreneurTaxes #1099Life #BusinessOwnerTaxes #TaxStrategy #TaxEducation #BusinessFinance #TaxConsultation #Keeper #TaxUniversity #TaxRelief2025 #PayrollSetup #IRSCompliance #TaxDeductions #TaxFilingHelp #MoneyTips #SmallBusinessTips #BusinessOwnerLife #TaxSeasonReady #PassiveIncomeTips #StartABusiness #MoneyMatters #FinancialLiteracy