LLC vs S-Corp for Content Creators: When to Switch

Short answer: once your creator profit passes roughly $50K a year, an S-corp election usually wins. Below that, the ~$3–4K of running costs can outweigh the savings.

The math

A default LLC pays 15.3% self-employment tax on nearly all profit — $14,129 on $100K. An S-corp splits income into a reasonable salary (taxed normally) and distributions (no self-employment tax). Pay yourself a $60K salary on $100K of profit and payroll taxes apply only to the salary — keeping roughly $5,000–$9,500 per year, growing as you scale.

The three rules that keep it safe

• Reasonable salary: skipping payroll entirely is the classic audit trigger. A common benchmark: not less than ~30% of profit.
• Run real payroll: the salary must actually be processed, not just intended.
• Mind the QBI deduction: salary level affects your 20% Qualified Business Income deduction — set it with a professional, not a guess.

Bonus: audit profile

Sole-proprietor Schedule C returns are audited at multiples of the rate of S-corps. The right structure both saves money and lowers scrutiny.