The wrong entity quietly costs contractors tens of thousands a year. S-corp elections and reasonable salary, LLCs, C-corps, QSubs, holding companies, and what happens when you run several companies at once.

Most contractors think setting up an LLC means they’re “done.”

12 Apr

Entity Structure

Most contractors think setting up an LLC means they’re “done.”

Posted by

Janet Mercer

April 12, 2026

They’re not. What I see all the time:– No EIN– No separate bank account– Personal and business funds mixed– Contracts and income still in their personal name At that point, you don

S-Corp Salary Mistakes That Trigger Audits

12 Apr

Entity Structure

S-Corp Salary Mistakes That Trigger Audits

Posted by

Janet Mercer

April 12, 2026

If you’re a contractor with an S-Corp paying yourself $40K while netting $300K… You’re on thin ice. “Reasonable compensation” is the #1 S-Corp audit issue. The IRS standard is simp

12 Apr

Entity Structure

“S corp saves taxes.”

Posted by

Janet Mercer

April 12, 2026

Sometimes true.Sometimes very expensive advice. An S corporation is not a badge of success — it’s a tool. And like any tool, it only works when used correctly. Yes, S corps can red

🚧 Contractors with a C-Corp: Stop putting your truck & equipment inside the company.

12 Apr

Entity Structure

🚧 Contractors with a C-Corp: Stop putting your truck & equipment inside the company.

Posted by

Janet Mercer

April 12, 2026

Here’s a strategy more contractors should know (and do correctly): Personally own the asset… and lease it to your corporation. That can include:✔️ work truck✔️ trailer✔️ skid steer

🚧 Contractors: Should You Have an LLC? (The Real Answer)

12 Apr

Entity Structure

🚧 Contractors: Should You Have an LLC? (The Real Answer)

Posted by

Janet Mercer

April 12, 2026

If you’re a construction contractor still operating under your personal name… or worse… as a “side hustle” with no business structure… You’re playing financial Russian roulette. Be

Contractors: The S-Corp “Loss Write-Off” Advantage Nobody Explains Simply

12 Apr

Entity Structure

Contractors: The S-Corp “Loss Write-Off” Advantage Nobody Explains Simply

Posted by

Janet Mercer

April 12, 2026

Most contractors think S-Corps are only about:💰 “Saving self-employment tax.” But here’s a different benefit that can matter a LOT—especially in early years or big equipment years:

🟣Contractors: S-Corp “Reasonable Salary” Can Make or Break Your Tax Savings

12 Apr

Entity Structure

🟣Contractors: S-Corp “Reasonable Salary” Can Make or Break Your Tax Savings

Posted by

Janet Mercer

April 12, 2026

Everyone wants an S-Corp for one reason: 🟣to reduce self-employment tax But here’s the part contractors mess up: 🟣You can’t just pay yourself $20K and call the rest “distributions.

🚧 When Construction Deals Fail: The Tax Fallout

12 Apr

Entity Structure

🚧 When Construction Deals Fail: The Tax Fallout

Posted by

Janet Mercer

April 12, 2026

Contractors often spend real money trying to buy:• Another construction company• A specialty trade shop• A competitor with crews & equipment When the deal dies, the big question is

If you run an S-Corp and pay yourself a salary + distributions, December 26 is not too late to fix one of the most audited issues contractors face: reasonable compensation.

12 Apr

Entity Structure

If you run an S-Corp and pay yourself a salary + distributions, December 26 is not too late to fix one of the most audited issues contractors face: reasonable compensation.

Posted by

Janet Mercer

April 12, 2026

Underpaying yourself is the #1 reason S-Corps get audited—and it’s how contractors end up owing back payroll taxes, penalties, and interest years later. A few reminders before year

Income splitting gets hyped online as “easy tax savings.” In reality, it’s one of the fastest ways contractors end up audited if done wrong.

12 Apr

Entity Structure

Income splitting gets hyped online as “easy tax savings.” In reality, it’s one of the fastest ways contractors end up audited if done wrong.

Posted by

Janet Mercer

April 12, 2026

Yes—income splitting can be legitimate. But only when it’s real, documented, and defensible. What income splitting is not:• Hiding income• Paying family members who don’t actually

If you own an S-Corp and work in the business, the IRS expects you to pay yourself a reasonable salary.

12 Apr

Entity Structure

If you own an S-Corp and work in the business, the IRS expects you to pay yourself a reasonable salary.

Posted by

Janet Mercer

April 12, 2026

Not sometimes.Not “when cash flow improves.”Always. Here’s why this matters in construction 👇Many contractors take little (or no) payroll and pull everything out as distributions t

Entity Structure

If you run your construction business as an S corp, LLC, or sole prop, you should know the Section 199A deduction (the 20% pass-through business deduction) is now permanent thanks to the new tax bill.

Posted by

Janet Mercer

April 12, 2026

But here’s the deal…If your 2025 taxable income goes over $197,300 (single) or $394,600 (married), that 20% deduction can phase out fast — or disappear completely. Here are 3 year-

Many contractors running S-corps think, “I’ll just pay myself a big bonus at year-end, withhold taxes, and call it good.”Sounds smart, right? Not so fast.

12 Apr

Entity Structure

Many contractors running S-corps think, “I’ll just pay myself a big bonus at year-end, withhold taxes, and call it good.”Sounds smart, right? Not so fast.

Posted by

Janet Mercer

April 12, 2026

Here’s why this strategy can backfire: 1) Payroll taxes sting: A $100,000 W-2 bonus can cost you and your company over $15,000 in extra Medicare and Social Security taxes — far mor

How to Correctly Pay Yourself and Take Cash from Your Business 💰

12 Apr

Entity Structure

How to Correctly Pay Yourself and Take Cash from Your Business 💰

Posted by

Janet Mercer

April 12, 2026

One of the most common questions I get from business owners is:“What’s the right way to pay myself from my business?” The answer depends on your business structure. Here’s a quick

🏢 QSub vs. LLC: Which Structure Works Best?

12 Apr

Entity Structure

🏢 QSub vs. LLC: Which Structure Works Best?

Posted by

Janet Mercer

April 12, 2026

For S corporation owners, forming a Qualified Subchapter S Subsidiary (QSub) can be a smart move. Here’s why it matters: A QSub is disregarded for federal tax purposes—so the paren

Entity Structure