What is an S-Corporation?

An S-Corporation (S-Corp) is a tax status your LLC or corporation can elect with the IRS. It doesn’t change your business structure — just how you’re taxed. The big win? Instead of paying self-employment tax (15.3%) on all your profit, you pay yourself a reasonable salary through payroll and only that portion gets hit with payroll tax. The rest avoids those extra taxes. Translation: big tax savings, legally. Think of it like Netflix: you pay a monthly subscription fee (your payroll taxes), but once you’ve paid, you can binge as much profit as you like without extra charges.