As your business grows, your tax advisor will likely recommend that you transition from an LLC to an S Corp to gain a few tax advantages once you’re at about a $50,000 profit mark for the year. 

When you do, you will become an official W2 employee of your company. 

Plus, as you’re growing at that level, you’ll likely start considering bringing on one or more full-time employees.. 

In this episode, Sydney and Kristen discuss this transition and what it looks like, plus some considerations you need to keep in mind from an accounting and bookkeeping perspective that might change based on what’s required of you.

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01:29 — Making the switch to become an employee of your business and to hire W2 employees

03:18 — When should you make your LLC an S Corp? 

04:54 — The requirements you must meet to maintain an S Corp

07:09 —  How to properly onboard yourself as an employee

11:29 — Identifying a “reasonable” salary to pay yourself 

13:33 — How becoming an S Corp can affect the way your bookkeeping and accounting needs to be managed

RESOURCES MENTIONED: 

• Gusto Payroll Software: https://gusto.com/r/sydney0959 

ADP Payroll Software: https://www.adp.com/what-we-offer/products.aspx