S-Corp vs. LLC? We Run the Numbers.
Most NYC/Tri-State business owners are overpaying self-employment tax AND NYC Unincorporated Business Tax. Our analysis finds the optimal structure—with IRS-compliant documentation to back it up.
Free S-Corp vs LLC comparison. See your estimated savings in minutes.
S-Corp vs. LLC: Example Comparison
Hypothetical NYC owner with $150K net profit
| Tax Category | LLC (Current) | S-Corp (Optimized) | You Save |
|---|---|---|---|
| Self-Employment Tax | $21,195 | $10,710 | $10,485 |
| NYC UBT (4%) | $6,000 | $0 | $6,000 |
| QBI Deduction | Limited | Maximized | Varies |
| Net Savings | $14,000–$16,000 |
Hypothetical example based on $150K net profit, $70K reasonable salary, NYC resident. Your actual savings will vary. We run the numbers on your specific situation.
The Reasonable Salary Problem
Set your salary too low? IRS reclassifies distributions as wages + penalties. Set it too high? You're wasting thousands in unnecessary SE tax.
IRS audit trigger. Distributions likely reclassified.
Defensible with industry data. Maximum savings.
Leaving money on the table. SE tax too high.
We run your numbers against IRS guidelines, NYC UBT rules, and industry comp data (BLS/RIMS data for NYC metro) to find the defensible sweet spot.
Estimated NYC Savings by Profit Level
Hypothetical examples — your actual savings depend on your full financial picture
Estimates only. Actual savings depend on full financials, NYC sourcing, and IRS/NY review.
Business Tax FAQs
S-Corp, LLC, and NYC UBT questions answered
NYC UBT is a 4% tax on net income for unincorporated businesses (sole proprietors, partnerships, LLCs taxed as partnerships) operating in NYC. There's a $95,000 exemption, but above that, you're paying 4% to NYC on top of federal and state taxes. S-Corps are generally NOT subject to UBT if reasonable salary is paid—this is often the biggest savings for NYC business owners.
The IRS expects S-Corp owner-employees to pay themselves a 'reasonable salary' before taking distributions. Too low triggers IRS reclassification. Too high wastes your tax savings. The sweet spot is typically 40-60% of net profit, but it depends on your industry, hours worked, and comparable salaries in your field. We run your specific numbers against BLS data to find the defensible amount.
Generally, S-Corp makes sense when your net profit exceeds $50,000-$75,000 after paying yourself a reasonable salary. Below that threshold, the payroll compliance costs (~$1,500-$3,000/year) may outweigh the tax savings. We run the full analysis including NYC UBT to give you a definitive answer.
NYC can allocate business income to NYC based on where your customers are, not just where you work. Without proper allocation documentation, NYC auditors may claim 100% of your income is NYC-sourced. We build the allocation proof you need to defend a lower NYC percentage—potentially saving thousands in UBT.
We document your reasonable salary using IRS-approved factors: industry comp data (BLS statistics), your duties and hours, company profitability, and what comparable employees earn in the NYC metro area. This documentation package is what protects you if the IRS or NYC ever questions your salary amount.
100% Accuracy Guarantee
If we make an error, we cover penalties and interest.
Maximum Refund Guarantee
Every credit and deduction applied, or your prep fee back.
Audit Representation Included
Your EA represents you before the IRS at no extra cost.
Ready to see your S-Corp savings?
Book a free consultation. See your estimated savings in minutes.
Business tax preparation: $500 – $1,000 depending on entity type and complexity.