Category: S Corporation

Electing S Corporation status can be a smart move for therapists in private practice looking to save on taxes. By passing income directly to shareholders, an S Corporation helps avoid double taxation. However, it’s essential to navigate the risks involved carefully. Here’s what you need to know to ensure your S Corporation stays compliant and…

If you’re a therapist in California, you may already know that forming a Limited Liability Company (LLC) to provide professional services is not an option. According to California law (Section 17701.04(e) of the California Corporations Code), LLCs cannot be used to render professional services, which include therapy. This restriction makes the S Corporation (S Corp)…

As a therapist operating as an S Corporation, you’re likely aware of the tax benefits, such as avoiding double taxation. However, one critical aspect that often gets overlooked is “reasonable compensation.” The IRS requires that any shareholder providing services to their S Corporation receives fair market compensation. Failing to meet this requirement can lead to…

Are you a therapist in private practice looking to enhance your financial acumen and protect your personal assets? An S Corporation (S Corp) could be an ideal choice for your business structure. This guide will educate you on the essentials of S Corporations, including how they work, their requirements, and the benefits and drawbacks to…