Your entity type determines your tax rate, your self-employment tax burden, how banks evaluate your lending applications, and whether your business is positioned for growth. Most owners pick one and never look back. That's a mistake.
Most business owners choose their entity structure once — usually when they first file with the state — and never revisit it. But as your business grows, that initial choice can cost you tens of thousands every year.
The right structure affects four critical areas of your business. Each one compounds over time, making the gap between optimized and unoptimized businesses wider with each passing year.
Determines your effective rate and available deductions
Self-employment tax of 15.3% can be reduced or eliminated
W-2 income and corporate financials improve lending terms
The right structure signals sophistication to investors
Each entity type has distinct tax treatment, cost implications, and strategic fit. Here's how they compare.
We don't just recommend an entity type. We model the complete picture — tax savings, compliance cost, lending implications, and growth trajectory. For businesses that need ongoing financial planning and reporting, entity structure is where we start.
We assess your existing entities, how income flows through them, and whether the structure is costing you money.
For businesses with real estate, IP, or multiple revenue streams — separating holding and operating entities protects assets and optimizes taxes.
We model the optimal salary-to-distribution ratio to minimize self-employment tax while keeping you audit-safe.
Entity choice has different tax implications depending on your state. We evaluate nexus, franchise taxes, and state-specific elections.
Your entity structure at $500K shouldn't be the same as at $5M. We plan for where you're going, not just where you are.
These are the most expensive errors we see when auditing a new client's business structure.
At this revenue level, you're paying full self-employment tax on every dollar of profit. An S-Corp election alone could save $20K–$40K per year.
The IRS requires S-Corp owners to pay themselves a reasonable salary. Taking only distributions is an audit red flag that can trigger penalties, back taxes, and interest.
Multiple LLCs, holding companies, and trusts sound sophisticated — but unnecessary complexity increases compliance costs and creates more places for errors to hide.
The entity that made sense at $300K in revenue may be actively costing you money at $3M. Most business owners never revisit their structure — and overpay for years.
We'll audit your current structure and model the alternatives. If there's a better setup, we'll show you exactly how much it saves.
Tell us about your business and we'll identify every savings opportunity available to you.