Ep 77: I May Be Able to Save on My Freelance Taxes—Here’s What I Found
I always assumed my LLC taxes were set in stone until a freelancer friend mentioned she elected S Corp tax status, which sent me down a research rabbit hole. Turns out, you can choose how your LLC is taxed: the default treats you like a sole proprietor where you pay self-employment tax on everything, but electing S Corp status lets you split income between salary and distributions, potentially reducing some taxes—though it comes with trade-offs like running payroll, more filings, and higher accounting costs. I'm not a tax professional and I'm still evaluating this with my accountant, but I'm sharing in case you're like I was—assuming there's only one way to handle your business taxes when there might be other options worth exploring with your tax professional.