Plug in your practice’s profit and see how taking part of it as a salary (and the rest as a distribution) could reduce your tax bill. Spoiler alert: The savings might surprise you.
An S Corporation isn’t a new type of legal entity—it’s just a different way to have your existing medical practice (likely an LLC or PLLC) taxed. But that small change can have a big impact on how much tax you pay as a physician-owner.
With an S Corp election, you still own your practice as usual. But instead of taking 100% of your profits as self-employment income—and paying self-employment tax on all of it—you split that income. You pay yourself a reasonable salary as a physician, and take the rest as a distribution.
Here’s the kicker: Distributions aren’t subject to self-employment tax. That’s where the savings come in.
It’s just a different tax classification for your existing LLC or PLLC
And then take the rest as a shareholder distribution
Which can lead to significant tax savings
Let’s say your medical practice nets $300,000 in profit. If you’re taxed as a regular LLC, you could owe around $30,000 in self-employment tax. If you elect S Corp status, and pay yourself a salary of $90,000 while taking the other $210,000 as a distribution, your self-employment tax might drop to around $14,000.
You pay around
in self-employment tax
You might only pay around
in self-employment tax
That’s $16,000+ that could stay in your practice—or be reinvested into new equipment, staff bonuses, or your retirement plan.
Slide to enter your estimated yearly income and see a side-by-side comparison of taxes as a sole proprietor vs. an S-Corp—including your potential savings.
Ready to make the switch or have questions? Our team can guide you through setting up your S-Corp and maximizing your savings.
We’ll handle the paperwork to elect S Corp status with the IRS, so you can start saving on taxes.
We’ll manage filings and deadlines to keep your S Corp in good standing.
