The S-corporation is the workhorse entity for profitable small businesses — and the source of more preventable mistakes than any other. Done right, it reduces self-employment tax and opens serious retirement planning opportunities. Done wrong, it invites IRS attention and California penalties. I've worked with S-corporations for thirty years, from election to dissolution.

S-corporation returns — Federal 1120-S and California 100S, with clean K-1s and basis tracking so your personal return holds together.

 

S elections — Including late elections when the paperwork didn't happen on time. There's often a fix; it needs to be done correctly.

 

Reasonable compensation — The IRS requires owner-employees to take a fair salary before distributions, and too-low salaries are a leading audit issue. I benchmark and document a defensible number for your role and hours.

 

California PTET election — The pass-through entity tax converts a capped personal deduction into a fully deductible business expense. Even with the higher federal SALT cap in place through 2029, it still saves many higher-income owners real money — but it must be elected and prepaid on schedule.

 

Retirement plan strategy — This is where S-corps shine. A solo 401(k), or for strong earners a stacked safe-harbor 401(k), profit sharing, and cash balance plan, can shelter income at a scale most owners never hear about.

 

Wind-downs and dissolutions — Final returns, final payroll, and California dissolution filings, done in the right order so nothing follows you.

 

Is an S-corp right for you?

Not always. Below a certain profit level, the payroll costs and extra filings outweigh the savings. I'll run your numbers both ways and give you a straight answer — including "not yet."