A lot of people in Alaska are self-employed and don’t even know it. There are lots of stories about fishermen and the IRS. Everybody’s got the friend of a friend who got hit hard.
If you profit in the upper five figures (or more) annually from 1099’s or self-employment activity, you may be a prime candidate to operate as an s-corporation.
The Subchapter S election is straightforward way to save on self-employment taxes. One caveat is that it does require a few more forms to file annually, so it really shouldn’t be considered unless you are willing to invest the time and effort to learn how to prepare them yourself. Or, more likely, be willing to pay a qualified person a reasonable sum to prepare them for you.
For tax savings on up to 15% of your first $120,000 in profits (plus an additional 3-4% on amounts beyond that!), it might be very worthwhile though.
Our Alaska S Corporation kit
We provide two base entity options of the kit, one with a limited liability company. The other with a corporation. If you are a one-man operation or don’t have immense complexity, odds are you will want our LLC kit. The reasoning for this is because it has fewer annual requirements and generally is easier to set up and operate.
Both kits include instructions for setting up the entity type in the state of Alaska as well as filing IRS Form 2553 federally.
Option 1) LLC:
Option 2) Corporation:
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If this guide doesn’t align with your learning style and you’d still feel more comfortable having someone else set this up, contact us at steve.nelson@stephenlnelson.com and ask for a refund.
Additional Resources
Blue Collar S Corporations: Lots of professions that require you to get your hands dirty still provide plentiful profits!
How S-Corps Are Taxed: Get an understanding of why the s-election is so effective for small business owners.