S-Corp Analysis and Business Entity Election in Columbia, MD
Someone told you an S-corporation election would save you a fortune in self-employment tax. They may be right. They may also have left out the payroll costs, the separate return, the reasonable compensation requirement, and the fact that below a certain profit level the whole thing loses money.
The election is a math problem, not a strategy everyone should adopt. It deserves to be answered with your actual numbers.
We run S-corp analysis for Maryland business owners who want to know whether electing makes financial sense before they file anything with the IRS. That means a break-even calculation on your real profit, a defensible reasonable compensation figure, and a clear model of salary versus distributions — including what the ongoing compliance will cost you every year afterward.
Sometimes the answer is yes and the savings are substantial. Sometimes it's not yet, and we'll tell you what profit level would change that. Either way you'll have the number rather than somebody's rule of thumb.
What's included
Break-even analysis on election Reasonable compensation determination
Salary vs. distribution modeling Election filing and setup
Freelancers, sole-proprietors, small business owners and contractors who have $100,000 in net profit.
Who this is for
1. We talk - Short call, straight answer on fit.
2. You get a proposal - Written scope, flat pricing.
3. We get to work - Onboarding handled for you.
How it works
What it costs
Flat project fee for the analysis. Ongoing S-corporation compliance priced separately.
Common questions
What profit level makes this worth it?
The there is no exact profit level, however if your profit can absorb the cost of owner reasonable compensation.
What counts as reasonable compensation?
There are a multitude of other factors that can go into calculating reasonable compensation. To put it simply, it is roughly the amount it would take to replace the owner.
Can I elect mid-year?
Yes you can, however electing mid-year adds to complexity of tax filing. It is best to wait until the beginning of the year.