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  • Writer's pictureTax Strategies Inc

Case Study: Attention Business Owners Making 3M+ Who Want to Pay Less Taxes!

Updated: Jul 5

Many self-employed, sole proprietorship business clients have come to me over the years and asked the same question: "Would I save more money if I incorporated?" In most situations, the answer is YES.


I've heard many other accountants and CPAs say that changing from a sole proprietorship business to an S-Corporation would provide no benefit, the business would just be a different entity but the income and expenses would be the same. This simply is not true.


That is why I made this table for both my current and prospective sole proprietorship business clients.

$3,000,000

Gross Income

Sole Proprietorship Schedule C-Tax

S-Corp Tax

Tax Difference

Federal

$61,000

$26,700

$34,300

NY State

$16,000

$13,800

$2,800

Additional Payroll Tax

$0

$1,000

-$1,000

Totals

$77,600

$40,500

$36,100

47% Less! **

*All numbers rounded to the nearest $100

**Numbers above are for illustrative purposes only. Everyone's situation is different. Results may vary.


The above table depicts a regular sole proprietorship business client that I took and prepared the same return as an S-corporation for tax purposes. The client had the same income and general expenses. However, a client with an S-corporation gets many benefits that most accountants and CPAs do not realize. These come in the form of:


1) over $10,000 in tax-free fringe benefits,

2) over $10,000 in non-taxable reimbursements, and

3) over $10,000 in non-taxable income.


Thanks to these tax saving strategies, a $3,000,000 gross income sole proprietorship business client could save over $36,000 in taxes when they incorporate and file as an S-corporation instead!


Additional S-corporation benefit: an IRS audit rate which is 12 times lower than the audit rate of sole proprietorship businesses.


Does your accountant do this for you? Do you need to open a new door? New prospective corporate clients can schedule a consultation to discuss our corporate tax saving strategies, and the first hour of the consultation will be credited to any future work our office performs for you.


Paying less tax is exactly the same as earning more money.


Schedule your tax consultation today at www.nytaxstrategies.com!


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