What is an S Corp?
An S-corporation separates you from your company completely for both
operational and tax purposes. The business is its own entity, and you, as the owner, are the sole shareholder and an employee. To create an S-corporation, you must file articles of incorporation with the state, appoint officers, and create bylaws for the business. Many one-person businesses may initially find these requirements too time-consuming and expensive, but, in reality, you can obtain significant tax savings if your business ends up making a substantial profit.
Why choose an S-corp?
In contrast with Sole Proprietor status, single-person S-corporations don't pay self-employment tax because the owner earns a salary paid as payroll. Payroll taxes are deducted from these earnings, and the S-corporation pays the employer portion of the Medicare and Social Security taxes.
How can Payroll Vault help?
Our Payroll Vault team will keep your business in compliance with simple payroll processing for the owner and any other employees on a schedule that works for your business.
Contact us to learn more
Payroll Vault Santa Barbara