The Truth About S Corps

✅ Wondering if an S corp is the right move for your business? Let's talk through your numbers → www.createwealthfp.com/meetjeff Everyone on the internet is telling you to get an S corp. But is it actually right for you? The S corp is one of the most hyped tax strategies for self-employed people, and for good reason. Splitting your income between a W-2 salary and shareholder distributions can meaningfully reduce your self-employment tax bill. At $150,000 in net profit, that difference could be several thousand dollars a year. But here's what those viral posts leave out: an S corp comes with real overhead. Payroll processing, a separate corporate tax return, stricter bookkeeping, and potential state fees can easily run $2,000 to $5,000 or more per year. Your state could tack on additional taxes and fees as well. Then there's the reasonable salary requirement. The IRS doesn't let you pay yourself a token wage to maximize distributions. Your salary has to reflect what you'd pay someone else to do your job, and getting that wrong is one of the fastest ways to trigger an audit. In this video, we break down exactly how the math works, where the real break-even line sits, what income level actually justifies the election, and the common mistakes that turn a smart strategy into an expensive one. _ _ Timestamps: 0:58 What and S Corp Election Does 02:44 The Hidden Costs of an S Corp 04:39 The Reasonable Salary Trap 06:28 When an S Corp Election Might Make Sense 8:10 Summary of S Corp election risks and missteps _ _ Create Wealth Financial Planning, LLC (CWFP) is a registered investment advisor offering advisory services in the State of FL and in other jurisdictions where exempted. All content on this site is for informational purposes only. Portions of this content may have been generated with the assistance of AI tools. Investing involves risk and the potential for loss. Please speak with a financial professional to evaluate your personal situation before taking action on any items discussed on this page. Comments and reactions by viewers are not a guarantee of future investment outcomes and are beyond the control of Jeff McDermott and Create Wealth Financial Planning. Public comments are not selected, amended, deleted, or sorted by CWFP, although personally identifiable information, scam or fraud messages, and misinformation may be removed. Create Wealth Financial Planning is a financial advisor serving executives, small business owners, and rising professionals.