Elizabeth Ayoola

But I did do some research myself, of course.

Now, how it saved me thousands of dollars.

With an S-Corp, you only pay self-employment taxes on whatever...

in quotes, is a reasonable salary according to the IRS that you pay yourself.

But the rest of your profit is exempt from self-employment taxes.

But as an LLC, you have to pay self-employment taxes on 92.35% of your net earnings.

I know, right?

It's so specific.

All right.

So the next thing, I actually really like this one because again, it was a real life learning, but decide on how you're going to pay taxes throughout the year.

My first year as an LLC, I did not know anything about estimated taxes because I didn't check, so I wasn't paying them.

But luckily, I was withholding enough from my W-4, so I didn't end up being fined by the IRS.

But with that said, you are required to make quarterly estimated taxes by the IRS, and you can make those payments using IRS Form 1040-ES.

Sounds like that to me, too.

But I will say if you're going to DIY, use a self-employment tax calculator to make sure that you're withholding or rather paying enough estimated taxes.

Now, I say withholding because I'm excited to get to my next point because I save myself a lot of time by doing this.

Now, another option that you have if you happen to have a nine to five like myself is to withhold enough taxes from any W-2 income that you might have.

So I spoke with my tax professional and they actually helped me calculate how much I should withhold from my W-2.

And all I had to do was submit a new W-4 with my new withholding.

And that was it.