1. Business Bank Account Set Up
   • Ensure that you have a checking account in the name of your new holding S Corp
2. Change any auto distributions from your business to THIS account instead of your personal account

To make discretionary partnership distributions to your holding S Corp, follow these steps:

1. Transfer funds from your Top Co (partnership) account to your Holding S Corp bank account
2. Transfer funds from your Holding S Corp bank account to your PERSONAL Bank account

It is important to follow this flow and not to skip the intermediate steps for both tax and asset protection purposes!

In order to maximize the tax benefits of this structure and stay in compliance with an S Corporation, you must pay an owner's wage each year.  Please note - this is quite flexible and you can technically pay 1x per year.  However, we recommend a quarterly payroll for solo S Corp owners.

Steps to Set Up:

Sign up your NEW S Corp for Gusto here.  NOTE - you may need to use a different email if your primary business has Gusto. 

• State Tax Set Up - for all state instructions to ensure your payroll account is registered, check out these step by step guides.
• Link your Business Bank Account
• Link your Personal Bank Account

• Depending on the state where your Holding S Corp is organized, you will need to file an Annual Report each year to keep company information accurate
• Each state is different, but be prepared to update both personal and company information by the due date set out by the applicable state

No later than 12/31, your Holding S Corp must have run an owner's wage!  Please note, this can be done more frequently, but at a bare minimum, annually.

Rule of Thumb - your share of Profit from the Main Company * 30% = Target Wage by 12/31.

If you plan on running a monthly or quarterly payroll, you may want to keep it on the lower side and then you can "true up" in December to the optimal reasonable comp percentage!

Please reach out for assistance with Gusto, if necessary.

GO CPA will prepare your S Corp tax returns, due 3/15.  Just  keep this on your radar!

If applicable, ensure your S Corporation is reimbursing you for you Accountable Plan for items such as:

• Business use of auto (if owned personally, you should pay for the auto personally and your S Corp can reimburse the business use)!
• Home Office (ask your Project Manager for a tracker if you do not have one)

If you have children that will be helping you out, you can hire them through the S Corp!

Follow Steps 5-7 here