If you’re self-employed and making over $70K, you’re leaving serious money on the table if you haven’t incorporated. We're not just talking about minor tax savings here; we're talking about a total transformation in how you handle your finances, build wealth, and set yourself up for long-term success. If you want to level up your business and unlock opportunities you didn’t even know existed, it’s time to stop thinking like a freelancer and start thinking like a CEO.
Here’s why incorporating is non-negotiable for someone at your income level.
Let’s get straight to the point: incorporating can save you thousands—yes, thousands—in taxes every year. When you’re a sole proprietor or self-employed, you’re hit with self-employment taxes on top of income tax. That’s around 15.3% of your income going straight to Social Security and Medicare. But when you incorporate, especially as an S Corporation, you have the power to split your income into two categories: salary and dividends.
Here’s the magic: you only pay self-employment taxes on the salary portion. The rest? That’s distributed as dividends, which aren’t subject to self-employment taxes. This simple shift in how you categorize your income can save you thousands of dollars every year. Think about that—money that you can now reinvest in your business, use for growth, or put towards your personal financial goals.
Incorporating isn’t just about tax savings on income—it opens the door to a whole new world of deductions. When you’re incorporated, you can structure your business to take advantage of additional write-offs that sole proprietors often miss. We’re talking about everything from health insurance premiums to retirement plans, and even home office expenses.
For instance, as an incorporated business, you can set up a Solo 401(k) or SEP IRA, allowing you to contribute far more than you could as an individual. This means you’re building wealth for your future while reducing your taxable income today. That’s a win-win. And if you’re not leveraging these tax strategies, you’re losing ground—because your competition certainly is.
One of the most important reasons to incorporate is asset protection. As a sole proprietor, your personal assets—your home, your car, your savings—are on the line if your business faces a lawsuit or goes into debt. When you incorporate, you create a legal shield between your personal assets and your business. This means your personal wealth is protected if something goes wrong in your business.
Think about it: why work so hard to build wealth, only to put it at risk by not incorporating? You’ve put in the effort to earn more than $70K a year—don’t let one mistake or lawsuit wipe out everything you’ve built. Incorporating gives you the legal protection to keep your personal finances safe, no matter what happens in your business.
Incorporating isn’t just about saving money or protecting assets—it’s about changing your mindset. You’re not just someone hustling to make a living—you’re the CEO of your own company. And when you step into that role, your entire approach to business changes. You start thinking strategically. You start looking for ways to scale, to expand, to grow.
When you’re incorporated, you’re not just working for a paycheck—you’re building a business that can grow beyond you. This is how you create a legacy, something that can continue generating wealth and opportunity even when you’re not directly involved. Incorporating is the first step to going from self-employed to business owner—and that’s a whole different game.
One of the biggest challenges for self-employed people is figuring out how to save for retirement. Without an employer-sponsored 401(k), many freelancers and sole proprietors fall behind in building their retirement nest egg. But when you incorporate, you gain access to a range of retirement plan options, like a Solo 401(k) or a Defined Benefit Plan, that allow you to contribute much more than a traditional IRA would allow.
Imagine being able to put away up to $66,000 a year in a tax-deferred account, or even more if you’re older than 50. That’s the kind of retirement strategy that gives you real financial freedom, and incorporating is the gateway to making that happen. Don’t leave your retirement to chance—take control of it by incorporating and setting up the right plan.
Let’s face it—perception matters. When you’re incorporated, you’re not just another freelancer; you’re a legitimate business entity. This adds a level of professionalism and credibility that clients, partners, and vendors notice. When you’re incorporated, you’re playing a different game—you can negotiate better contracts, attract higher-level clients, and position yourself as an expert in your field.
And it’s not just about appearances. Many larger companies and government agencies prefer to work with incorporated businesses. Incorporating opens doors to new opportunities that you might not even be aware of yet. You’re already making over $70K—why not position yourself to make even more by stepping up your professional game?
If you’re making over $70K and you haven’t incorporated yet, you’re leaving money, protection, and opportunity on the table. Incorporating isn’t just a legal formality—it’s a strategic move that will change how you manage your finances, protect your assets, and build your future.
Don’t wait. The longer you operate without incorporating, the more you’re exposing yourself to unnecessary risks and missing out on serious financial gains. Take control of your business, your taxes, and your future by incorporating today. You’ve already proven you can succeed—now it’s time to elevate your game and build a business that truly works for you.
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