Business owners (or wannabes) - we're getting tactical today! Don't skip this 'sode just because it doesn't sound sexy...it might save you tens of thousands of dollars in your business over the next few years.
Pelvic PT Rising: The pelvic health tools to make you a better clinician and/or a more successful business owner. We want every single pelvic health practitioner to be more confident and successful in your practice and career!
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As business owners, we actually get a ton of tax benefits that a regular employee does not. One of those is the ability to choose how we are taxed.
This is all about the payroll taxes (~15%) we are all required to pay. When you were an employee, your employer contributed half of those (7.5%) and you contributed the other half (7.5%). Now that you're acting as both, you can owe 15% on every dime of profit you bring in if you're taxed as a sole proprietor (regardless of whether you're a sole prop, LLC, P-LLC, PC, or corporation).
However, if you elect to be taxed as an S-Corp you only pay payroll tax on what you actually put through payroll. This just has to be 'reasonable'. And the rest is 'pass-through' income, meaning you don't pay payroll taxes on it!
Generally our recommendation is if you're expecting $70-80k in profit, it absolutely makes sense to move to an S-Corp.
Just as an example. If you bring in $100k in profit over the year and are taxed as a sole proprietor, you pay 15% of that in payroll tax (and THEN still have to pay income tax!). That's $15,000 in taxes.
But as an S-Corp, you could pay yourself $50k through payroll. That's taxed at 15% (the government always gets theirs), but the remaining $50k is 'pass-through' income. This means you just saved $7,500 in taxes!
Now you might have to pay an additional $2k or so for tax prep for an S-Corp, but you're still saving more than $5,000 per year. Added up over a decade, even if you aren't growing, it's more than $50,000 in tax savings!
Listen to the full 'sode here on Apple Podcasts or Spotify!
Learn more about pelvic health with our Clinical Courses
All of the Rising clinical courses are designed to:
Challenge the way you think
Make you more confident in your clinical practice.
Allow you to go-at-your-own pace (all online!)
Let you go back to your work: you'll have lifetime access to the lectures and handouts. Check out all the clinical courses we offer (www.pelvicptrising.com/clinical).
Curious about private practice? Check out our Business Resources
We've now helped more than 500 cash-based pelvic health practices start and grow.
We want to make sure you're building a business that works for you (instead of vice-versa) and actually enjoy the process along the way!
See all the business resources we offer (www.pelvicptrising.com/business), tailored specifically to pelvic health!
Nicole Cozean, PT, DPT, WCS
Founder of Pelvic PT Rising and PelvicSanity Physical Therapy in Southern California.
Dedicated to forever changing pelvic health with online clinical courses to help you be more confident in your practice and business resources to help start and grow pelvic health businesses.
Jesse Cozean, MBA
Co-founder of the Pelvic PT Rising and the Rising Podcast.
Jesse uses his business experience to help pelvic health business owners start and grow their practices so they can build a practice that truly works for them. From website design, SEO, conversions, marketing, finance and money mindset, he wants to make the process of owning your own practice easier and fun.