Entity & S-Corp strategy
Whether an election makes sense for you, what to pay yourself, and how to run the corporation properly once it’s in place, from the advisor who also prepares both returns.
Considering an S-Corp
An S-Corp election can reduce self-employment tax for a profitable business. It also adds payroll, a separate business return and ongoing compliance. Each step below stands on its own.
Step 1 · Analyze
Whether the election makes financial sense, with added payroll and compliance costs counted.
Step 2 · Plan
Election analysis plus reasonable compensation, with one combined review call.
Step 3 · Implement
S corporation tax setup for an LLC or corporation already formed with its state.
An S corporation is not the right choice for every business. If the numbers don’t support an election yet, we’ll say so and tell you what would need to change.
Already have an S-Corp
Most one-owner S-Corps choose the coordinated package so the K-1, owner wages, business activity and personal return agree from the start.
Recommended for one-owner S-Corps
Form 1120-SShareholder K-1Form 1040Business stateOwner state
If either return is more involved, we send a written scope change with the added fee, and do no extra work until you sign it. Return preparation doesn’t include an election analysis or year-round planning; those are separate services.
Reasonable compensation
S corporation owners who work in the business must pay themselves reasonable compensation for their services. There is no IRS-published safe-harbor salary or formula. We build your figure from your role, time commitment and market data for comparable work, and document how we reached it.
FAQ
It depends on your profit, your state and how you operate. An election can reduce self-employment tax for a profitable business, but it adds payroll, a separate business return and ongoing compliance costs.
The S-Corp Election Analysis ($500) puts both sides in writing. If the numbers don’t support an election yet, we’ll say so, and tell you what would need to change.
S corporation owners who work in the business must pay themselves reasonable compensation for their services. There is no IRS-published safe-harbor salary or formula. We build your figure from your role, time commitment and market data for comparable work, and document how we reached it.
For most one-owner S-Corps, we recommend the S-Corp + Owner 1040 Package, which prepares the 1120-S and your personal return together. If you’re unsure your salary is defensible, the Reasonable Compensation Analysis ($400) is a fixed-fee place to start.
LLC + S-Corp Setup, which includes the state formation filing, isn’t open to new clients yet. Contact us and we’ll let you know when it opens. Lobo provides tax and filing services, not legal advice: we don’t draft operating agreements or advise on liability protection, and can refer you to an attorney for those. State filing fees are separate.
The Intro Call is a free conversation to understand your situation and recommend the right service and fee. It isn’t tax advice or a tax consultation, and no client relationship begins until you sign an engagement letter. If you’d like professional advice right away, a Tax Strategy Session ($300) is the place for it.
Start with a conversation
A free Intro Call about your profit, your state and how you operate. If an analysis is the right next step, you’ll know before you pay for one.
S Corporation Fit
Answer a few questions about your business, and we’ll suggest the right place to start. For some businesses, the answer is not yet.
