There are roughly 42.7 million federal student loan borrowers as of Q4 2024, creating an opportunity to provide additional insight to your clients beyond tax preparation. By leveraging certain tax and repayment strategies, you can help your clients reduce their tax liability and lower their student loan payments in one strategic swoop. Here’s how.
The Ultimate Business Upgrade: Turning Your Partnership into an S Corp Without the Tax Bite
Dominique Molina, CPA MST CTS
Looking to cut down on self-employment taxes on your partnership income? Converting your partnership into an S corporation might be the answer. If you currently run your business as a partnership or an LLC taxed as a partnership, you’re probably familiar with the sting of self-employment taxes. Unlike shareholder-employees of an S corporation, who only pay Social Security and Medicare taxes on their salaries, partners typically get hit with self-employment taxes on their entire share of the business’s net income. That can add up fast. By transitioning to an S corporation, you can restructure how you take your income—splitting it between salary and profit distributions. The big advantage? Those profit distributions are not subject to self-employment tax, potentially saving you thousands each year. So, if reducing your tax burden sounds appealing, let’s break down how a tax-free Section 351 incorporation works and what you need to know before making the move.
