The S-corp break-even
Schedule C self-employment income pays 15.3% SE tax on every dollar. S-corp owner-employees pay payroll tax only on reasonable salary, with distributions taking the remainder. Break-even is typically around $45,000–$60,000 in net income.
Deductions consultants miss
Home office, phone and internet, continuing education, software subscriptions, and the Self-Employed Health Insurance Deduction are all frequently underclaimed.
Retirement options
Solo 401(k) allows up to $70,000 in total contributions for 2025, plus Roth option and catch-up for age 50+. SEP-IRA is simpler to administer but has lower limits and no Roth option.
Common questions
- When should I become an S-corp?
- Once net income consistently clears $45,000–$60,000. The payroll and administration costs have to be less than the SE tax savings.
Related
Business Tax Planning
S-corp reasonable salary analysis, entity elections, retirement plan structuring, and Section 179 planning for small business owners.
Florida Business Incorporation
Form an LLC, S-corp, or C-corp in Florida with the right entity structure and IRS election in place from day one.
Tax Planning
Year-round tax planning for individuals and business owners. We model decisions before they become tax liabilities.