Influencer Parker saves $14k with Cookie Finance
Parker is a lifestyle influencer and blogger that made $250,000 last year. She was working with a local accounting firm that would have cost her thousands of dollars in unnecessary taxes because they said she should not become an S Corp.
Result: In late December, we got everything set up for Parker to become an S Corp which allowed her to save $14,000 in taxes by making that election
Parker's local accounting firm said that it was not advisable for her to make the S Corp election, even though she made $250k that year! Parker signed up with us on December 21st and within a matter of 3 days we had her S Corp put together, payroll set up, and everything in place to make the election.
By making the S Corp election, Parker saved $14,000 in federal taxes by avoiding unnecessary Self Employment taxes.
The S Corp election
We tell clients that it typically makes sense to make the S Corp election when you are on track to earn $100k/yr from your content creation as the standard. At that point, you can easily save $5,000+ in taxes. And the savings only increase the more you make.
The S Corp election is a fantastic way to save money on your taxes. If you are making more than $100k/yr, you should talk with your CPA to learn how to make the election and the process involved.
Saving money as an S Corp
The way creators save money by becoming an S Corp is by saving money on self-employment taxes. Self-employment taxes come out to 15.3%, and that is on top of the federal and state taxes you owe! It is by far one of the largest taxes you will pay as an entrepreneur.
The S Corp essentially allows you to avoid paying ~50% of those taxes.
Working with the right accountant
Your accountant should proactively be telling you about the S Corp. If they are not, bring it up at your next meeting with them. Just be sure to do it well ahead of December 31st since there are a number of things you need to do to make the election.
If you would like our team to help you with that, we would be delighted to do so. Schedule a call with us today!
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