MARK KOHLERMain Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, Main Street Professionals, LLC · Owner at Main Street Professionals, LLC

Stop Overpaying Taxes With This Simple S-Corp Strategy

10 Nov 2025 · 1 min

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Mark Kohler explains how S-corps save money on taxes. With $150,000 in sales and $50,000 in expenses, an LLC owner pays roughly $15,000 in self-employment tax. An S-corp avoids this by splitting profit into a W-2 salary and a K-1 distribution, cutting the tax bill significantly.

Chapters

In the S corp you're going to have gross revenue or sales, you're going to have expenses and then you're going to have your profit. Let's say you're going to make 150 grand in sales and you have 50 grand in expenses. Your profit would be $100,000. Again if some of you may remember if you take that 100 grand and run it through just a plain old LLC or sole proprietorship you're going to pay 15 grand in self employment tax. If you are not an S corp we don't want to do that. We want to take salary of a certain amount and then let everything else push through on a K1 that's the profit. So you're going to get a W2 and a K1. Well how much did salary be? That's the quandary. Now to answer that question we have to look at what is your profit and I want to take a percentage of that profit and allocate it to salary.