I run an S-corp (one man) and wish there was a simple answer to this. There are way too many factors to consider before getting to any conclusion. The biggest a

I run an S-corp (one man) and wish there was a simple answer to this. There are way too many factors to consider before getting to any conclusion. The biggest advantage of an S-corp is the ability to save on the payroll taxes that the employer has to pay. But that really depends on how much you make, how much you take in salary/W-2 etc. But again, there are other costs of running an S-corp that add up really fast. For example, the accounting and taxes are much more complicated for S-corps and you certainly need a good CPA for it. I suggest you talk to at least 2-3 CPAs and get an idea. Even the CPAs differ in their understanding and preferences. My CPA insists that S-corp is good for me while another one I spoke to kept telling me to switch to LLC. In general, you need to consider the following factors: 1. Social security tax portion of employer. This has a cap at about 110K i think in 2012. So any income over that, does not matter anyway. FOr 2012, the rate was 6.2%. lets say you earned 100K but only paid yourself 75K with S-corp. At a high level, you will save almost 2K in ss taxes portion of the employer. 2. Medicare tax portion of the employer. This one is huge since there is no cap. So the less you pay in salary, more you save in tax.