The Perks of Being an S-Corporation
If you have been in private practice as a therapist for any length of time, you may have heard about the idea of becoming an S-Corporation. There are many differences between an S Corporation, a Limited Liability Corporation (LLC), and sole proprietorship.
The differences, benefits, and drawbacks of each option can be more thoroughly discussed with an accountant. An accountant can also advise you on whether or not the S-Corporation option is the best option for you, and further advise you on the best structure for you.
In the meantime, I want to outline the benefits that I've personally experienced since becoming an S-Corporation:
You don't need your 1099 forms from insurance companies it comes to filing your taxes
I don't exactly know the reason for this, but I've been told this by at least 3 accountants so far.
Better health insurance options
Being an S-Corporation can allow you to be a W-2 employee within your own business.
This can then allow you to qualify for insurance plans outside of the Healthcare Marketplace, such as HMAA.
In my experience, my copays, deductibles, and overall health insurance benefits have been much more affordable through HMAA than they were when I had an HMSA plan through the Healthcare Marketplace, even though my monthly premiums were actually similar.
Likely Tax Savings
Becoming an S-Corporation can allow you to save money on self-employment taxes.
By setting a reasonable salary, your business then pays taxes on the reasonable salary amount instead of on your gross income earnings.
Automated Tax Payments
Becoming an S-Corporation allows you to sign up for services like Gusto, which automatically withdraws your federal tax payments, state tax payments, W4 withholdings, and other tax withholdings.
Gusto will even reimburse you and your employees for things like cell phone usage, WiFi usage, gym membership, and more (once you configure this feature, of course). You can use this feature even if you are the only employee within your practice.
If you own a group practice, Gusto can also assist you with setting up workers' compensation benefits, TDI, and other benefits
Gusto has really helped me to streamline the financial and tax-related aspects of my business. I encourage you to check them out if you're interested!
If you do, you can even get a credit of $100!
Sign up for Gusto, get a $100 credit!
Sincerely, Jessica Wong, LCSW
Owner of the Hawaii Therapist Hub, LLC: https://www.thehawaiitherapisthub.com/
Owner of DaVine Counseling Services, LLC: https://www.davinecounseling.org/
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