In this episode, I break down the essentials of self-employment tax and explore how forming an S Corporation can unlock valuable tax benefits. I walk through key tax strategies, what makes an S Corp worth considering, and why understanding state regulations matters for self-employed entrepreneurs like us.

I also highlight how strong bookkeeping, proper payroll, and strategic financial planning help protect your business income and maximize your tax return. If you’re navigating entrepreneurship and want to keep more of what you earn, this episode offers practical, real-world guidance.

Also mentioned in this episode:

00:00 Understanding Self-Employment Tax

03:25 The Benefits and Risks of S Corporations

06:20 Criteria for Forming an S Corporation

11:55 Navigating State Regulations and Compliance

Takeaways

• Self-employment tax is 15.3% for self-employed individuals.

• An S Corporation can help save on self-employment taxes if criteria are met.

• Forming an S Corp requires running payroll and compliance with employment laws.

• You cannot undo an S Corp election for five years.

• Check state regulations as some may tax back S Corp benefits.

• Consistent profit over $60,000 is a key criterion for forming an S Corp.

• Bookkeeping is essential when operating as an S Corp.

• Having more money than time indicates readiness for an S Corp.

• Professional guidance is crucial when forming an S Corp.

• Be cautious of advice from unlicensed sources regarding taxes.

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Links:

Link to pre-order my book, Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed.

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