Maximizing S-Corp Tax Savings With Strategies
Update: 2025-09-04
Description
When comparing S-Corp vs LLC taxes, the main distinction comes down to how profits are taxed. In a standard LLC, all profits pass through to the owner and are subject to self-employment taxes in addition to regular income tax. With an S-Corp, however, owners can split income between salary and distributions. Only the salary portion is subject to payroll taxes, while distributions are taxed at the standard income rate without extra self-employment tax. This difference often results in thousands of dollars in savings each year, depending on the business’s profit level.
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