Olsen Strategy LLC
The S-Corp election saved me $7,200 in self-employment tax in 2024. The math is simple once someone shows you the spreadsheet.
David Olsen, Founder · $165K profit · Solo · Formed 2023
The situation
David had operated as a sole proprietor for 6 years generating roughly $165K in annual consulting profit. He paid full 15.3% self-employment tax on every dollar.
What File.Business did
Formed an LLC for legal protection. Elected S-Corporation tax treatment via Form 2553. Set up Gusto payroll for a $75K reasonable W-2 salary. Remaining $90K flows through as distributions exempt from SE tax.
The outcome
2024 tax bill reduced by approximately $7,200 versus the prior sole-proprietor year. Payroll cost (Gusto) was $480/year. Net savings: $6,720. Time invested by David: about 4 hours total.
Key facts
| Industry | Management Consulting |
|---|---|
| Entity structure | Minnesotan LLC + S-Corp election |
| Year formed | 2023 |
| Scale at story point | $165K profit |
| Team | Solo |
About this case study
This is a representative composite case study based on patterns we see across many similar customers. Names and identifying details have been changed. The structure, services, and outcomes described are typical of customers in this segment.
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