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You’re Probably Paying $15,000 More in Taxes Than You Should

You’re Probably Paying $15,000 More in Taxes Than You Should

If you’re a contractor running a sole prop or single-member LLC — and your profit is over $100K — this is for you.

You’re paying 15.3% self-employment tax on every dollar of profit. All of it. No strategy. No protection. No leverage.

An S-Corp election changes that. You pay yourself a reasonable salary — SE tax hits the salary only, not your full profit. The rest comes out as a distribution. No SE tax on distributions.

On $300K in profit, that’s a $15,000–$25,000+ difference. Every year.

And yet most contractors never make the switch. Because their CPA didn’t bring it up. Or they assumed it was too complicated. Or they didn’t know the threshold.

It’s not complicated. It just has to be done right. Timing matters. Payroll structure matters. Basis matters.

Done wrong, you lose the benefit. Done right, you keep tens of thousands — every year.

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