5-Minute PRIME: Bite-Sized Investing Insights
The 5-Minute PRIME podcast from REIPrime.com helps busy professionals master personal finance and real estate investing with quick, actionable tips. Keep learning, stay strategic, and keep building - one smart move at a time!
5-Minute PRIME: Bite-Sized Investing Insights
S-Corp vs. LLC in 2026: The New Math of Tax Savings in Real Estate
You just closed your biggest deal of the year and you’re celebrating a $100,000 profit. But there’s a "silent partner" waiting at the table to take a $15,300 cut before you even pay income tax. That partner is the Self-Employment Tax, and if you are operating as a standard LLC, you invited him in.
In this episode of the 5-Minute PRIME Podcast, host Martin Maxwell breaks down why the "One Big Beautiful Bill Act" didn't just fix bonus depreciation—it saved the critical 20% Pass-Through Deduction (QBI). But to capture it without getting crushed by self-employment taxes, you need the right vehicle. We’re firing your silent partner and showing you how to plug the leak in your bucket.
Tune in to learn:
- The Self-Employment Penalty: Why active investors in standard LLCs are taxed harder than W-2 employees, paying both halves of Social Security and Medicare.
- The "Two-Bucket" Strategy: How the S-Corp election allows you to split income into Salary and Distributions to legally wipe out thousands in taxes.
- The "Reasonable Salary" Trap: Why paying yourself $0 is an audit trigger and how to use data to set a salary that keeps the IRS happy while you keep your cash.
- The $50,000 Tipping Point: The exact math on when the administrative costs of an S-Corp are outweighed by the massive tax savings.
Are you ready to stop voluntarily donating thousands to the IRS? Subscribe now to learn the mandatory "Manage" phase move for 2026.
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