May 31 • General discussion
The S-Corp Question Every Small Business Owner Asks
🏢 "Should I convert my LLC to an S-Corp?"
— Here's the honest answer:
This is one of the most common questions I get, and the answer is: it depends.
An S-Corp can save you money on self-employment taxes — but only if your net profit is above a certain threshold (typically $40,000–$50,000/year). Below that, the added complexity and cost of running payroll may not be worth it.
Here's a quick breakdown:
✅ S-Corp makes sense when:
- Your net profit is consistently $40K+
- You're willing to pay yourself a "reasonable salary"
- You want to reduce SE tax on the distribution above your salary
❌ S-Corp may NOT make sense when:
- You're just starting out or income is inconsistent
- You don't want the added admin (payroll, quarterly filings, etc.)
- Your state has high franchise taxes on S-Corps (CA charges a minimum $800/year)
If you're in California or Virginia and wondering if this applies to you — drop your annual net profit range in the comments and I'll give you a quick honest take.
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The S-Corp Question Every Small Business Owner Asks
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