#231: Tactical Tuesday: How to Structure your Business & Leverage Tax Benefits

<p class="p1"><span class= "s1"><strong>OVERVIEW:</strong></span></p> <p class="p1"><span class="s1">Jason A. Duprat, Entrepreneur, Healthcare Practitioner, and Host of the <em>Healthcare Entrepreneur Academy</em> podcast, talks about the importance of understanding taxes to structure your business for tax advantages so you can pay yourself more. He shares options for how business owners can structure their businesses and highlights which option will provide the most benefits in terms of tax savings.</span></p> <p class="p1"> </p> <p class="p1"><strong><span class="s1">EPISODE HIGHLIGHTS:</span></strong></p> <ul> <li><span class="s1">You have options when it comes to how you pay yourself as a business owner and subsequently, the amount of tax you pay. This is based on how you structure your business. <br /></span></li> <li><span class="s1">One option is a sole proprietorship and the other is an S Corporation <br /></span></li> <li><span class="s1">You can also run your business as an LLC yet if you do, you’ll want to consider filing an S Corp election (Form 2553) to take advantage of tax benefits.<br /></span></li> <li><span class="s1">As a sole proprietorship, you would pay taxes (income and FICA) on all of your earnings. This includes Social Security at 6.25% and Medicare at 1.45%. This is paid at the employee level and the employer level so a total of 15.4% is taken out.  <br /></span></li> <li><span class="s1">In 2022, a cap was placed at $147,000 in income. So you would pay taxes on this maxed amount which equals $22,000.  <br /></span></li> <li><span class="s1">As an S Corp, you can take advantage of huge tax benefits because you can pass-through income from the business to owners or shareholders. <br /></span></li> <li><span class="s1">In this type of business structure, the owner would take a reasonable salary. What’s deemed reasonable is up for debate and based on the risk the owner can take. <br /></span></li> <li><span class="s1">Be sure to talk with your CPA in order to determine the salary you should