If you’re a South Carolina resident operating a profitable small business, you should consider forming either a limited liability company or a corporation and then electing s-status with the IRS. This simple move can save you a whopping 15.3% on self-employment taxes. This kit can help if you need help setting up your entity or if you already have an existing LLC or corp. Why? It walks you through the steps of the what needs to be filed where and provides sample organizational documents, in the event of a new entity. It also has instructions for getting the Form 2553 filed with the IRS, which is where you may be able to skip to if you already have an eligible entity.
Here’s how those savings are possible: If you are not operating as an S corporation, you’re paying federal and state income taxes on all profits. That part you probably know. But, you are also paying self-employment tax as well. Up to 15% on the first $120,000 of income. That’s over $18,000! Ouch! An s-election can trim those to a fraction.
If that sounds like a pretty sweet deal, that’s probably because it is! We sell both an LLC and a corporation version of the South Carolina kit. We, along with most accountants, tend to recommend operating as an LLC if you have any doubts. This will give you the same type of legal protection but means less red tape and requirements. Your time is valuable!
Our South Carolina S Corporation kit
As we mentioned, there are two entity options available to be taxed as Subchapter S-corporations, so we have two different kits.
The LLC version can be obtained at the link below. As a bonus, it comes with a single and multiple-member operating agreement :
If you want to use a traditional corporation you can purchase it here, which also comes with example corporate bylaws:
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E-mail us at firstname.lastname@example.org if for any reason you are unsatisfied with your purchase. We will refund full cost of the kit.
How S-Corps Are Taxed: We gave a short description of the savings here above, but more information available in this free article.
Making Shareholder Distributions Look Reasonable: Be sure to keep your salary at a reasonable level as an s-corp.
What Sort of Accounting System Do I Need?: If you were planning on it, don’t fall victim to using something like keeping receipts and entering the data into Excel.