Should I Be Taxed as an S-Corp?

Business owners (or wannabes) - we're getting tactical today!  Don't skip this 'sode just because it doesn't sound sexy...it might save you tens of thousands of dollars in your business over the next few years.As business owners, we actually get a ton of tax benefits that a regular employee does not.  One of those is the ability to choose how we are taxed.This is all about the payroll taxes (~15%) we are all required to pay.  When you were an employee, your employer contributed half of those (7.5%) and you contributed the other half (7.5%).  Now that you're acting as both, you can owe 15% on every dime of profit you bring in if you're taxed as a sole proprietor (regardless of whether you're a sole prop, LLC, P-LLC, PC, or corporation).However, if you elect to be taxed as an S-Corp you only pay payroll tax on what you actually put through payroll.  This just has to be 'reasonable'.  And the rest is 'pass-through' income, meaning you don't pay payroll taxes on it!Generally our recommendation is if you're expecting $70-80k in profit, it absolutely makes sense to move to an S-Corp.Just as an example.  If you bring in $100k in profit over the year and are taxed as a sole proprietor, you pay 15% of that in payroll tax (and THEN still have to pay income tax!).  That's $15,000 in taxes.But as an S-Corp, you could pay yourself $50k through payroll.  That's taxed at 15% (the government always gets theirs), but the remaining $50k is 'pass-through' income.  This means you just saved $7,500 in taxes!Now you might have to pay an additional $2k or so for tax prep for an S-Corp, but you're still saving more than $5,000 per year.  Added up over a decade, even if you aren't growing, it's more than $50,000 in tax savings!'Lighten the Load' in Your BusinessIf you're a business owner (or wannabe), we know how difficult the journey can be.  We've worked with 600+ businesses to make the process easier, help you avoid mistakes and build a business that works for you.  Head to our Business Resources (www.pelvicptrising.com/business) to see how we can help!About UsNicole and Jesse Cozean founded Pelvic PT Rising to provide clinical and business resources to physical therapists to change the way we treat pelvic health.   PelvicSanity Physical Therapy (www.pelvicsanity.com) together in 2016.  It grew quickly into one of the largest cash-based physical therapy practices in the country.Through Pelvic PT Rising, Nicole has created clinical courses (www.pelvicptrising.com/clinical) to help pelvic health providers gain confidence in their skills and provide frameworks to get better patient outcomes.  Together, Jesse and Nicole have helped 600+ pelvic practices start and grow through the Pelvic PT Rising Business Programs (www.pelvicptrising.com/business) to build a practice that works for them!  Get in Touch!Learn more at www.pelvicptrising.com, follow Nicole @nicolecozeandpt (www.instagram.com/nicolecozeandpt) or reach out via email ([email protected]).Check out our Clinical Courses, Business Resources and learn more about us at Pelvic PT Rising...Let's Continue to Rise!