LLC Tax & S-Corp Guides

An LLC is not a tax classification — it is a legal wrapper that can be taxed four different ways, and choosing the wrong one quietly costs profitable owners thousands of dollars a year. This section is about the tax decisions that actually move money: how default pass-through taxation works, when the S-Corp election starts paying for itself, how to set a reasonable salary that survives an audit, and how the QBI deduction interacts with all of it.

The throughline in everything here is the worked example. Tax content is full of vague "it depends" hedging; we put real numbers on the table — $50k, $150k, $500k of net profit — and show what each path leaves in your pocket after self-employment tax, FICA, and the deduction phase-outs. The S-Corp pieces go further than the usual "elect and save 15.3%" pitch: they cover the breakeven point honestly (below roughly $50–60k of profit the overhead eats the savings), the IRS court cases that define what "reasonable compensation" means, and the situations where electing is a mistake.

If you are a non-resident, note the hard limit up front: foreign nationals cannot be S-Corp shareholders, so the S-Corp route is closed to you regardless of the math — see the non-resident section instead. For everyone else, pair these guides with the calculators: model your own numbers in the S-Corp savings calculator and the QBI calculator rather than trusting a rule of thumb. Educational only — confirm your specific situation with a CPA or EA before filing.