How the Tax Code Shapes Your S Corporation Election in 2026

In this episode, Lucas and Luna examine how the tax code shapes S corporation elections, focusing on the 2026 landscape. They explore the pros and cons of S corp status for small business owners, including self-employment tax savings, reasonable compensation requirements, and the impact of the 2025 tax reform provisions that sunset in 2026. Lucas walks through a concrete example of a marketing consultant saving $8,000 annually by electing S corp treatment, while Luna raises questions about IRS scrutiny and administrative burden. The hosts discuss recent IRS guidance on shareholder basis and loan guarantees, offering practical advice for entrepreneurs considering the switch. They also touch on how state-level conformity issues affect S corp elections. The episode ends with a forward-looking question about potential legislative changes under the 2026 tax reform debate. Whether you're a freelancer, small business owner, or CPA, this episode provides specific, actionable insights on one of the most popular tax elections for closely held businesses. #S Corporation #SmallBusiness #TaxCode #SelfEmploymentTax #ReasonableCompensation #IRS #TaxReform #2026TaxChanges #PassThroughEntities #Section1244Stock #BasisRules #SubchapterS #TaxPlanning #BusinessStructure #Economics #FexingoBusiness #BusinessPodcast #TaxPolicy Keep every episode free: buymeacoffee.com/fexingo