Brand Deals, Sponsorship & Business
S corporation
Also called: S-corp, S corp election
Nothing changes about the company itself. An existing LLC or corporation elects to be taxed under subchapter S, after which the owner has to run payroll and pay themselves a reasonable salary. That salary carries payroll tax; profit taken above it as a distribution does not, and the gap is where the saving lives.
The saving has to clear the cost. Payroll, an extra return and an accountant who handles it properly all cost money every year, and the reasonable salary test stops you paying yourself a token wage. It only pays above a steady level of profit, and it is a United States structure. Creators elsewhere are looking at an entirely different set of rules.