S-Corp Tax Planning in NYC
What We Cover
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Reasonable Salary Determination — The IRS scrutinizes S-Corp officer compensation. Set it too low and you’re inviting an audit. Set it too high and you’re defeating the purpose of the election. We analyze comparable salaries and set a number you can defend.
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PTET Election & Compliance — New York’s Pass-Through Entity Tax lets S-Corps and partnerships pay state tax at the entity level, giving owners a workaround for the $10,000 federal SALT deduction cap. We handle the election, the estimated payments, and the credit on your personal return.
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NYC Unincorporated Business Tax Avoidance — One of the underrated benefits of S-Corp status: incorporated businesses don’t pay NYC’s 4% UBT. For a business earning $200K in net income, that’s $8,000 a year in savings just from the entity election.
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Form 1120-S & K-1 Preparation — We prepare the S-Corp return, generate accurate K-1s, and make sure the numbers flow correctly to your personal 1040.
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Payroll Setup & Processing — S-Corps require payroll for the owner. We set it up, run it, file the quarterly 941s and NYS-45s, and handle year-end W-2s.
S-Corp Planning in New York City
The S-Corp election saves money two ways in NYC. First, distributions above your reasonable salary are not subject to the 15.3% self-employment tax. Second, incorporating takes you out of the UBT entirely — a 4% tax that sole proprietors and LLC members pay on business income over $95,000.
But the election is not free. You have to run payroll, pay unemployment insurance, and file an 1120-S every year. There are also New York franchise tax minimums that apply regardless of how much income the business generates. For businesses earning under about $60,000 in net profit, the compliance costs eat up the savings. We run the breakeven analysis before recommending the election.
The PTET election deserves special attention. It’s optional, it requires estimated payments on a separate schedule, and it creates a credit on the owner’s personal return. Getting the timing wrong — or forgetting to make the election by the March 15 deadline — means losing the SALT workaround for the entire year. We track every deadline and handle the filings.
Ready to Get Started?
Not sure if an S-Corp makes sense for your situation? We’ll run the numbers and give you a straight answer.