The Ultimate Business Upgrade - 04-15-25

Looking to cut down on self-employment taxes on your partnership income? Converting your partnership into an S corporation might be the answer.If you currently run your business as a partnership or an LLC taxed as a partnership, you’re probably familiar with the sting of self-employment taxes. Unlike shareholder-employees of an S corporation, who only pay Social Security and Medicare taxes on their salaries, partners typically get hit with self-employment taxes on their entire share of the business’s net income. That can add up fast.By transitioning to an S corporation, you can restructure how you take your income—splitting it between salary and profit distributions. The big advantage? Those profit distributions are not subject to self-employment tax, potentially saving you thousands each year.So, if reducing your tax burden sounds appealing, listen in as we break down how a tax-free Section 351 incorporation works and what you need to know before making the move.This podcast is meant for entertainment purposes only. For the more thorough, complete, and accurately written version of this article which includes citations, visit us at http://www.tottb.tax