1. File LLC with state of New York (online, $200 fee)
a) Any name you want. And you're just doing a single member LLC
2. Apply for EIN with IRS (online, free)
3. File Form 2553 with the IRS. (print out and mail it) This will designate your LLC as a S-Corp
4. Now that you have an EIN, you can get a business bank account. I recommend Mercury.
a) The banks cannot see your EIN for a few days, so I would wait at least a week before applying for a Mercury account to avoid any issues.
5. Mercury is your bank account, but you also need a spending card. I recommend Capital One Spark. Super easy to use and it's got some of the best rewards/points
6. Buy QuickBooks Online (Simple Start, $30/mth) and connect it to your business bank account and credit card.
a) Then give access to any bookkeeper/accountant (like Brooklynn). They can categorize your transactions and talk with you about what qualifies or doesn't qualify.
7. Sign up for Gusto. ($45/mth) Now that you are an S-Corp, you need to be running TWO payments per month:
a) First payment will be through Gusto. This will be W2 income as a "Reasonable Salary". Rule of thumb here is that it should be 40-60% of your total income from the business. I'd recommend you start at $30-36K/year. So roughly $3K/mth right now should go through Gusto.
b) Second payment will be whatever else you want to pay yourself throughout the year. This is literally just a wire transfer from your Mercury account to your personal account. This payment is treated as a distribution! And this is where the tax savings comes in. This money is treated as the profits from your corporation and is not subject to self-employment tax.
i) Gusto article going over the savings in more depth
Congrats! You're now an S-Corp with everything you need to run your content creation business :D. A bookkeeper/accountant like Brooklynn can handle your tax returns (business and personal) and answer questions about what counts as a business expense.
My best guess is that by doing this, you'll save about $5,000 in taxes this year. That saving will only increase as you earn more money through the S-Corp. AND more savings as you write off more expenses through the S-Corp.
Every accountant and content creator will have a different philosophy of what to write off. Obviously, you need to stay out of trouble and not get crazy with it... But you can probably write off more than you think you can. Since you're a content creator, many of your typical 'personal' expenses tie heavily into your business.
1. File LLC with state of New York (online, $200 fee)
a) Any name you want. And you're just doing a single member LLC
2. Apply for EIN with IRS (online, free)
3. File Form 2553 with the IRS. (print out and mail it) This will designate your LLC as a S-Corp
4. Now that you have an EIN, you can get a business bank account. I recommend Mercury.
a) The banks cannot see your EIN for a few days, so I would wait at least a week before applying for a Mercury account to avoid any issues.
5. Mercury is your bank account, but you also need a spending card. I recommend Capital One Spark. Super easy to use and it's got some of the best rewards/points
6. Buy QuickBooks Online (Simple Start, $30/mth) and connect it to your business bank account and credit card.
a) Then give access to any bookkeeper/accountant (like Brooklynn). They can categorize your transactions and talk with you about what qualifies or doesn't qualify.
7. Sign up for Gusto. ($45/mth) Now that you are an S-Corp, you need to be running TWO payments per month:
a) First payment will be through Gusto. This will be W2 income as a "Reasonable Salary". Rule of thumb here is that it should be 40-60% of your total income from the business. I'd recommend you start at $30-36K/year. So roughly $3K/mth right now should go through Gusto.
b) Second payment will be whatever else you want to pay yourself throughout the year. This is literally just a wire transfer from your Mercury account to your personal account. This payment is treated as a distribution! And this is where the tax savings comes in. This money is treated as the profits from your corporation and is not subject to self-employment tax.
i) Gusto article going over the savings in more depth
Congrats! You're now an S-Corp with everything you need to run your content creation business :D. A bookkeeper/accountant like Brooklynn can handle your tax returns (business and personal) and answer questions about what counts as a business expense.
My best guess is that by doing this, you'll save about $5,000 in taxes this year. That saving will only increase as you earn more money through the S-Corp. AND more savings as you write off more expenses through the S-Corp.
Every accountant and content creator will have a different philosophy of what to write off. Obviously, you need to stay out of trouble and not get crazy with it... But you can probably write off more than you think you can. Since you're a content creator, many of your typical 'personal' expenses tie heavily into your business.
