When to Switch from an LLC to an S-Corp & Pay Less Taxes

If you’re working and no money is being withheld from the checks and wages you receive, then you’ll have to pay federal taxes, state taxes, social security and medicare, depending on the state you’re in.💰   When you are self-employed, you’re viewed as an employee AND as the employer.💼  S-Corp owners become W-2 employees under their own business.    As a shareholder underneath your LLC or Sole Proprietorship, it is NOT considered payroll when you take money out of your account.   Remember, when you operate as an S-Corp... At the end of the year, you’ll have to pay payroll taxes and take reasonable compensation.    If you have an S-Corporation, you can become an employee and are therefore no longer viewed as just the shareholder.   This is how you can eliminate your Self-Employment tax!   If you have any questions on what is said in this video, or specific to your situation, send me a DM on social media @karltondennis.