As a small business owner in the wedding industry, you’ve probably heard about S-Corporations (S-Corps) as a way to lower taxes and protect your personal assets. But is an S-Corp the right choice for your wedding planning, photography, floral, or catering business?
Maybe.
But also, maybe not!
In this post, we’ll cover the basics of when it does and doesn’t make sense – but we recommend you only make a final decision after speaking with your CPA.
What is an S-Corp?
An S-Corporation (S-Corp) is a type of business structure that allows profits to “pass through” to the owner’s personal tax return—avoiding double taxation that applies to C-Corporations. Unlike a sole proprietorship or LLC, an S-Corp can also help lower self-employment taxes.
👍 Key Benefit: With an S-Corp, you only pay self-employment tax on the salary you pay yourself—not your entire profit. This can mean big tax savings!
When should I consider an S-Corp for my wedding industry business?
- Your wedding business is making at least $100,000+ in profit
- You’re paying a lot in self-employment taxes
- You want to separate your personal and business finances
- You don’t mind a little extra paperwork to save money
If your wedding business is profitable and growing, an S-Corp could help you keep more of what you earn.
How an S-Corp saves wedding industry small business owners money
Most small businesses start as sole proprietors or LLCs, which means you pay self-employment tax (15.3%) on ALL your profits.
Let’s look at a very simple example to see how this plays out:
🚨 Without an S-Corp:
- You’re a wedding planner making $100,000 in profit.
- You owe $15,300 in self-employment tax on the entire amount.
But with an S-Corp, you can split your income into:
✔️ A reasonable salary (which is subject to self-employment tax).
✔️ Distributions (which are NOT subject to self-employment tax).
💰 With an S-Corp:
- You pay yourself a $50,000 salary (subject to self-employment tax).
- You take the remaining $50,000 as a distribution (NOT subject to self-employment tax).
- Now, you only pay self-employment tax on $50,000 instead of $100,000.
Tax Savings: About $7,650!
The downsides of an S-Corp
❌ You must pay yourself a “reasonable” salary
- You can’t just take all your earnings as distributions to avoid taxes. The IRS requires you to pay yourself a fair wage for your role.
❌ There’s more paperwork
- Unlike an LLC, an S-Corp requires separate payroll, bookkeeping, and annual filings.
❌ Not all wedding businesses benefit
- If your profit is under $100,000, the savings may not be worth the extra effort.
Should you switch to an S-Corp?
👍 If your wedding business is profitable and growing, an S-Corp could be a smart tax move.
👎 However, if your earnings fluctuate or are still small, it may be better to stick with an LLC or sole proprietorship for now.
To know for sure if an S-Corp makes sense for your wedding business, schedule an advisory session with our team. The right decision depends on your income, expenses, and long-term goals. We can help walk you through the process and give you confidence that you’re doing the right thing for your unique situation.
Additional resources
The Real Cost of Missing Tax Deductions for Your Wedding Industry Business
Why Wedding Industry Businesses Need a CPA
Biggest Tax Surprises for Small Businesses in the Wedding Industry
