LLC vs S-Corp: Build a Tax-Saving Business Structure
Follow this step-by-step checklist to legally reduce self-employment taxes and protect your personal assets.
Based on: The Only Video You Need For LLC's And S-Corps by Karlton Dennis
Follow this step-by-step checklist to legally reduce self-employment taxes and protect your personal assets.
Based on: The Only Video You Need For LLC's And S-Corps by Karlton Dennis
What if your business structure is quietly stealing $10,000, $20,000, or even $30,000 from you every single year — and you have no idea it's happening? That one question is exactly what Karlton Dennis, licensed enrolled agent and CEO of Tax Alchemy, asks the business owners he works with. And for many of them, the answer is uncomfortable. They picked a structure when they launched, never revisited it, and have been overpaying the IRS ever since.
Here is the problem most entrepreneurs run into: you started an LLC because someone told you to protect yourself, which was the right move. But as your income grew, so did your self-employment tax bill. With a standard LLC, every dollar of profit is hit with a 15.3% self-employment tax before federal and state taxes even touch it. On $160,000 in profit, that is over $22,000 gone before you see a cent. And most business owners have no idea this is happening until they get that first big tax bill.
Now imagine a different picture. You make one tax election with the IRS, split your income into a reasonable salary and shareholder distributions, and the self-employment tax only applies to your salary — not your distributions. On that same $160,000, your tax bill drops from $22,000 to $9,180. That is $13,428 back in your pocket every single year. Over a decade, that is more than $130,000 compounding and working for you instead of the government.
Karlton Dennis and his team at Tax Alchemy have helped clients document over $100 million in tax savings using strategies exactly like this. He breaks down not just the LLC-to-S-Corp switch, but when to make the move, what rules you absolutely cannot break, how real estate fits into the picture, and how elite entrepreneurs layer a family management LLC on top of their S-Corp to shift income to their children tax-free and build multigenerational wealth.
This checklist takes every actionable step from Karlton's most comprehensive LLC and S-Corp breakdown and puts it in a clear, sequential format you can work through with your CPA or tax professional. No fluff, no theory — just the exact moves, thresholds, forms, tools, and warnings you need to restructure your business the right way. If your net profit is approaching or already above $50,000, this checklist could be the most valuable $3.99 you spend this year.
Every checklist item comes with actionable notes to guide you — things like "Don't forget to do this before you start," "Avoid this common mistake," or "Set a reminder for 30 days out." Nothing vague, just clear next steps.
+ 17 more action items inside...
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