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Most LLC owners assume their structure is optimized, but a basic LLC often leads to thousands in unnecessary self-employment taxes. In this detailed breakdown, Mark J. Kohler explains the real differences between staying a default-taxed LLC and electing S Corporation status — what each structure does, when the numbers justify making the switch, and how to maximize tax savings while staying compliant.
You’ll learn the exact profit range where an S Corporation becomes advantageous, how salary versus pass-through income works, and the simple filing process to transition without dissolving your existing LLC. We also cover common mistakes to avoid, including switching too early, mixing passive and operational income, overpaying yourself on payroll, and mismanaging your quarterly filings.
We walk through ongoing costs, reasonable salary guidelines, and why S Corporations reduce both taxes and audit risk while opening the door to additional deductions, retirement strategies, and cleaner financial records.
If this video helped, subscribe for weekly tax strategies, drop your questions in the comments, and share this with another small business owner who wants to keep more of their profit!
CHAPTERS:
0:00 Intro
0:52 Why So Many Small Business Owners Overpay on Taxes
1:51 When to Make the Switch — The Magic Profit Zone
3:16 How the S Corp Actually Saves You Money
4:23 The Right Way to Transition
5:28 The Costs (And Why They’re Worth It)
6:30 Common Mistakes to Avoid
8:31 When a S Corp Might Not Be Right Yet
9:13 What Happens After You Switch
10:22 Outro
Resources:
Interview a Main Street Tax Pro that Speaks like Mark: https://taxadvisornetwork.markjkohler.com/?utm_source=mjk-youtube&utm_medium=description-link&utm_campaign=youtube-scripted-longform&utm_content=when-to-switch-from-llc-to-scorp
Meet with a Real Lawyer on Zoom: https://kkoslawyers.com/schedule-an-appointment/?utm_source=mjk-youtube&utm_medium=description-link&utm_campaign=youtube-scripted-longform&utm_content=when-to-switch-from-llc-to-scorp
Self-Direct Your IRA or 401k- Buy a Business or Real Estate with Your Retirement Account (Directed IRA): https://directedira.com/appointment/?utm_source=mjk-youtube&utm_medium=description-link&utm_campaign=youtube-scripted-longform&utm_content=when-to-switch-from-llc-to-scorp
Keep Your LLC or Corp in good standing and Hide Your Address (Main Street Business Services): https://mainstreetbusiness.com/?utm_source=mjk-youtube&utm_medium=description-link&utm_campaign=youtube-scripted-longform&utm_content=when-to-switch-from-llc-to-scorp
Become a Certified Tax Advisor in Mark’s Program – https://mainstreetpros.com/?utm_source=mjk-youtube&utm_medium=description-link&utm_campaign=youtube-scripted-longform&utm_content=when-to-switch-from-llc-to-scorp
Connect:
Website: https://markjkohler.com/?utm_source=mjk-youtube&utm_medium=description-link&utm_campaign=youtube-scripted-longform&utm_content=when-to-switch-from-llc-to-scorp
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Facebook: https://www.facebook.com/markkohler/?utm_source=mjk-youtube&utm_medium=description-link&utm_campaign=youtube-scripted-longform&utm_content=when-to-switch-from-llc-to-scorp
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