The answer is pretty easy, you only need to file for S Corp status if you need to hire employees. You can do it if you are profiting off others as freelancers and contractors – but you don’t have to.
Yes, technically you can save some money on self employment tax as an S Corp – because you will pay yourself less than you charge and then you get to keep the profits, called disbursements (which are not subject to self employment tax).
But, here is the problem: If you are the only one working for you, then ALL the money you make is your earnings.
You, as self employed, do have the right to profit (employees do not) – but don’t use that as an excuse to weasel out of paying your taxes.
If the IRS decides you are not paying yourself a fair wage, you are in big trouble.
We aren’t self employed because its cheap or easy. We do it in order to be in control of our life and work.
This post originated at http://www.brazenhustle.com