Last month, I had coffee with a friend who makes around $200K/year from her cohort and coaching programs.

She's unbelievably smart and has built a really engaged community. She’s great at what she does.

But when I asked how she handles her taxes, she said: "I just set aside 40% and pray it's enough on April 15."

I nearly spat out my cappuccino - that’s so much money just sitting in a checking account!

To be honest, this was me for a long time too. I love the work. Helping customers, creating content, building Saywhat. I could do that all day. 

The admin stuff like taxes, payroll and entity structure is the last thing on my list.

And I don't think most solopreneurs are any different. We put so much energy into our product and community that finances get whatever's left over… which at 8pm on Friday night is usually not much.

But it costs us a lot of money.

Here's what I mean.

If you're a full-time solopreneur in the US, you're probably a sole proprietor or a single-member LLC.

That means every dollar of profit gets hit with self-employment tax on top of income tax.

But if you choose to become an S-corp, you pay yourself a reasonable salary (say $100K) and take the rest as a distribution.

Then you only pay self-employment tax on the salary.

For my friend, that's up to $15,000 more in her pocket every year. Same revenue. Same business. Just a different structure.

The reason most people don't do it (myself included) is that it takes work to set up. You need to run actual payroll, handle quarterly filings, stay compliant etc etc. 

That’s why I chose Gusto. I wanted something that could grow with the business. When my wife, Caroline, left her corporate job to join me full-time, I knew we’d be set up with the right foundation.

It runs our payroll, handles the tax filings, and makes the whole S-corp thing pretty easy.

She also set up a 401K and health insurance through it, which I didn't even realize you could do as a solopreneur. Both come with tax advantages too.

I'm sharing this because I genuinely think most solopreneurs making $75K or more are leaving real money on the table just because the setup feels intimidating. 

It's not. It took us a few hours.

If you're a creator in a similar position, check out Gusto Solo and you could get up to 6 months free with the link below:

Ok no more admin and back to the work,

Will

P.S. here’s my favourite LinkedIn post of the week. Makes you think, we’re so early!