S Corp Election
An S Corporation election can save thousands in self-employment taxes every year. We prepare Form 2553, file it with the IRS, and verify your state compliance — all for a flat $350.
Why S Corp Election Saves You Money
As a sole proprietor or single-member LLC, you pay 15.3% self-employment tax on your entire net business income. An S Corporation election allows you to split your income into two parts: a reasonable salary (subject to payroll taxes) and distributions (not subject to self-employment tax).
For a business earning $120,000 in net profit, paying yourself a $60,000 salary and taking $60,000 in distributions could save roughly $9,000 per year in self-employment taxes. Over five years, that is $45,000 back in your pocket.
Potential Annual Savings
On $120K net profit: ~$9,000/year in self-employment tax savings. The $350 election fee pays for itself in the first month.
S Corp Election
- Form 2553 preparation
- IRS filing and confirmation
- State-level S Corp compliance check
- Reasonable compensation guidance
- Payroll setup recommendations
- Deadline monitoring
How It Works
Three steps from purchase to tax-optimized structure.
Purchase & Provide Details
Complete your purchase and provide your entity information, formation date, and shareholder details via our intake form.
We Prepare Form 2553
We prepare the election form with the correct effective date, verify state compliance requirements, and review reasonable compensation considerations.
Filed with IRS
Form 2553 is filed with the IRS. You receive confirmation of acceptance and guidance on next steps for payroll and tax compliance.
Key Considerations
S Corp election is powerful but not right for every business. Here is what to consider.
Timing Matters
Must be filed within 75 days of formation or by March 15 for current-year effect. Late elections require reasonable cause.
Reasonable Salary
The IRS requires S Corp owner-employees to pay themselves a reasonable salary. Setting it too low triggers penalties.
Payroll Required
S Corps must run payroll for owner-employees. This adds some administrative cost but is far outweighed by tax savings.
State Variations
California imposes a 1.5% franchise tax on S Corps. New York City does not recognize the election. We check your state.
Shareholder Limits
S Corps are limited to 100 shareholders, all of whom must be U.S. citizens or residents. Not suitable for all ownership structures.
Single Class of Stock
S Corps can only have one class of stock. If you need preferred shares or complex equity structures, a C Corp may be better.
Frequently Asked Questions
Common questions about this service area.
Related Services
Explore other ways we support our clients.
EIN Application
Need an EIN first? We handle the federal tax ID application for new entities.
Learn MoreBusiness Tax & Compliance
Professional S Corp tax preparation including Form 1120-S and K-1s.
Learn MoreTax Planning & Advisory
Strategic planning to maximize the tax benefits of your S Corp structure.
Learn MoreOptimize Your Tax Structure
Stop overpaying self-employment tax. Let us handle the S Corp election so you can start saving.
Book a Free ConsultationOr submit your details online