How to Set Up an S Corp Step-By-Step for FREE (2023 Guide)

2 options for starting your S Corp here:

In this video, I'm showing you how to create an S Corp step by step in 2024, the easiest and most affordable way. I get this question all the time, and this is exactly how I set up my own businesses, and I will walk you through the setup process. If you want to officially start a business in 2024, this video is for you.

Get a reasonable compensation report for your S Corp from RCReports:

I'll show you how to easily and affordably create an S Corporation with Bizee (previously IncFile). I earn a referral fee if you use their service at no additional cost to you. By using my links, you're supporting my channel - think of it as a tip for bringing you content!

Start your S Corp here (Incfile has rebranded as Bizee - same exact company!):

^I used Bizee/IncFile FOUR times and have nothing but great things to say about their service. I recommend getting the gold/platinum plan for 99% of business owners. It's the one I've used many times in the past and it saves you so much time, and ensures that there aren't any filing mistakes when it comes to your business. Avoid the silver plan as it misses out on a lot of key features that you'll want.

Set up your S Corp Payroll with Gusto (use this link to get a $100 FREE gift card):

^This is the payroll software I use to pay myself a W2 salary from my S corporation. If you use my link Gusto will send you a $100 gift card when you sign up :)

This video is a bit different than my other videos, but since I was getting this question so much I decided it would be helpful to walk you through setting up an S Corp for beginners. A lot of you out there are creating new side hustles or businesses, and an S corp is a great way to make your business more formal, take tax deductions, and limit your liability. It also allows you to reduce your taxes if you do make over 40-50k per year in net income. We'll talk about all the specifics and run through examples of when it makes sense to get an S corp versus an LLC.

S corps are harder to form and keep tabs on than LLC's - since you will need to run payroll to see any tax benefits. You'll essentially pay yourself a reasonable salary from your business. Yes, you will be a W2 employee of your own business. Any W2 salary you pay yourself will be subject to the 15.3% FICA self employment tax, which is something you're paying right now on all of your income. HOWEVER, any remaining profits count as distributions, and these are NOT subject to the 15.3% FICA tax. You can see how this can save you a lot of money each year if you make a certain amount of money. Most of my businesses are structured as S corps and it reduces my taxes my a significant amount.

I hope you get a ton of value out of this video - make sure to like and subscribe for more videos just like this! And if you want to check out other detailed tutorials like this, you can go to my StartupWise YouTube channel:

How to Set Up an LLC Step-By-Step for FREE (2022 Guide):

Happy hustling!!

-Charlie

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Disclaimer: Some of the links above may be affiliate links, which means that if you click on them I may receive a small commission. The commission is paid by the retailers, at no cost to you, and this helps to support our channel and keep our videos free. Thank you!

In addition, I am not a financial advisor. Charlie Chang does not provide tax, legal or accounting advice. The ideas presented in this video are for entertainment purposes only. Please do your own due diligence before making any financial decisions.

[CharlieChang]

Hope you find this guide helpful for starting your own S corp this year!

[Lunabrown]

Can you do more video's on passive income I tried out freelancing and online marketing it didn't work out fine, went into stock as you advised last year it didn't do that well but January this year I came up with an amazing investment strategy is stock trading that has been very profitable I was able to buy a house and a car from it. I would like more video on that so I can try out more stuffs.

[diannayau]

Super helpful walk through! Was initially afraid of electing as an S-corp given all the extra admin stuff, but watching this video gave me a lot of reassurance

[FlyingElvis]

Very good info. I have an LLC currently and was told to switch over and I pulled up your video! Thank you for articulating it in a way that we all can understand. 😂 (So many professionals use huge words to sound smart and just confuse everyone in the process.😂😂) Also I’m 48 with an 18 year old and i must say it looks like you are doing something you enjoy doing and are good at. I wish I would have done that in my 20’s. Luckily I have never lost the will to learn from everything. A lot unfortunately do as they get older. However I really enjoy and am encouraged by seeing young folks finding what they are good at and going after it. All that to say great video keep up the good work and I’m subscribing!

[VisaliaSynergy]

Great explanation and helpful specific recommendations Charlie. Well done, and I appreciate the time you took to provide this information. i know you gave more than you got out of this video.

[gummybears-n-crime]

Thank you this was VERY helpful. I used your link and signed up for an S Corp. It was super easy and quick. I followed along w/ your tutorial just in case b/c I was paranoid I would make a mistake. I will update here how it goes. Hoping the process is faster than expected and faster than if I were to try to figure it out myself!

[Real_Reviews]

Is there an optimal time to create the S-Corp? I've been operating as a sole prop and I'm so tired of the double tax.

[keanebydesign]

Is it really necessary to set up payroll if you're an s corp where you're the only employee? Is there an advantage to using a payroll system as opposed to just sending the amount to yourself every month from your business bank account?

[MaxMassa]

hi, what type of company do you suggest for less than $50k/year?

[beduboy]

Do you still pay a CPA to manage your taxes or is most of it taken care of by gusto?

[JustReviewitplz]

If I’m just starting my consulting business, I don’t have any revenue yet. Should I create an S Corp. and if not, how will I be protected if anyone tries to sue me?

[joannaf]

Question: What address do I use for my S-corp? I don't want to use my residence and you are not allowed a PO Box. Thank you,

[sojathefitnesstrainer]

What up charlie? Quick question. Can an s corporation be used for a t-shirt printing business?

[Lionel_Tran]

When I was hunting for a whitelist to buy a very dead PS contract, now there is Hectagon that allows me to buy other projects, do you guys think I should invest?

[CaptainCovaOfficial]

Great info! So is your YouTube channel business an LLC or SCORP and why?

[joetriesitall]

So i make $10k in 1099 income every year so ultimately it wouldn't be worth setting up an s-corp in my case?

[CDollaBillzz]

Does owner distributions count as a expense when you’re adding up expenses from the gross?

[tommycrestanello]

As Italian could be possible create an S Corp? or there is any constraint?

[shanawill]

What happens if you try to set a s corp after march 15 ?

[FavDogBisquit]

Man he said for free. he meant what he charges lbvs, man its between 300 and 600 for me'