Podcast Summary: "LLC vs. S-Corp: The $10K Decision Every Entrepreneur Faces"

The Amy Porterfield Show – Ep. released November 20, 2025
Host: Amy Porterfield
Guest: Braden Drake, Tax Attorney & Online Business Expert

Episode Overview

This episode dives deep into a pivotal decision all entrepreneurs eventually face: choosing between an LLC and an S-Corp for their business structure. Amy Porterfield, with the help of tax attorney Braden Drake, demystifies complex tax terms and business structures, focusing on actionable insights for online business owners. The episode is rich with personal anecdotes, practical advice, myth-busting, and step-by-step examples that clarify how legal and tax choices impact business growth, peace of mind, and tax savings—often as much as $10,000 or more per year.

Key Discussion Points & Insights

1. Common Financial & Tax Mistakes (04:00–06:00)

• Mixing Personal & Business Accounts

  • Braden: “The number one is not having a business bank account or at least having a separate bank account aside from the personal bank account. That's step one for everyone.” (04:13)
  • Tracking business income and expenses properly is essential for stress-free tax time and good bookkeeping.

• Inadequate Tracking and Overspending

  • Not tracking everything or simply overspending to chase deductions instead of financial health.
  • Braden: Overspending for "tax write-offs" is a common but costly error.

• When to Hire a Bookkeeper

  • Not everyone at $100k revenue needs a bookkeeper—wait until you have an S-Corp, then it's more necessary. (05:37)

• Entrepreneurs and Financial Literacy

  • Only about 10–20% of online entrepreneurs truly know how to read their P&L. Most struggle with understanding their finances. (06:00)

2. Financial Routines & Habits (06:51–09:03)

• Finance Friday & Money Monday Routines

  • Braden advocates for a simple, weekly habit: “The number one thing is doing your bookkeeping on a weekly basis.” (07:09)
  • Finance Friday (business) and Money Monday (personal) keep you ahead on transactions, credit card statements, tax savings, and unpaid invoices.

• Time Commitment:

  • For high-transaction-volume businesses: 30 mins/week.
  • For newer owners: as little as 10 mins/week. (07:59)

3. Tax Deductions: Facts vs. Myths (09:03–13:40)

• Bad Advice From Social Media:

  • Don’t believe flashy write-off tips like buying luxury vehicles (e.g., G Wagons) or expensive shopping sprees “for business.”
    • Braden: “If it sounds too good to be true, it probably is.” (10:23)

• Smart Deductions You Probably Missed:

  • Home Office Deduction: Includes part of housekeeping costs and utilities if you work from a defined home office. (12:05)
  • Contractor Payments: Legitimate and often overlooked.
  • Courses & Programs: Training and education (even Amy’s programs!) are tax-deductible.
  • Hiring Your Kids: Pay kids legitimately; can contribute to their IRAs—making it tax-deductible for them and a write-off for you. (13:04)

4. LLCs vs. S-Corps – Core Differences & Tax Implications (14:05–20:41)

• LLC:

  • A legal entity that gives liability protection—does not automatically change your tax treatment.
  • By default, taxed like a sole proprietor. (14:57)

• S-Corp:

  • A tax classification that can be adopted by an LLC (or a corporation) through IRS election.
  • Allows you to split income between a "reasonable salary" and dividends/distributions—only the former is subject to self-employment taxes.

• Braden simplifies with a real-world example:

  • $150,000 revenue, $50,000 expenses = $100,000 profit.
    • LLC/sole prop: Pay self-employment tax (15.3%) on all profit + income tax.
    • S-Corp: Pay self-employment tax only on your "salary" (e.g., $60k); remaining profit ($40k) goes to you as a distribution—saving 15.3% on that portion (about $6,000). (16:25, 19:22)

• When to Switch?

  • S-Corp usually only worth it at >$60K-$80K in consistent profit. Not before. (19:59)
  • Common mistake: not paying yourself a “reasonable salary” via payroll, risking IRS penalties.

5. Real-World Savings & Case Studies (21:11–22:34)

• Braden shares a client case:
  • “Our course creator client was profiting over $300,000. We put them on a salary of $120,000—and after setting up retirement, they saved about $10K a year in taxes.” (21:50)

6. How to Properly Pay Yourself as an S Corp (22:34–24:37)

• Before S-Corp: Build the habit by transferring a fixed amount from your business to yourself regularly.
• As an S-Corp:
  • Use payroll software (Braden prefers Gusto: (24:29))
  • Most pay themselves monthly or bi-monthly.
  • Key: Don’t skip payroll—big IRS red flag.

7. Lessons Learned: Biggest Tax Mistakes (25:37–28:12)

• Amy’s Regret: Chasing write-offs for the sake of deductions (e.g., spending $20K at year-end when she didn’t need to)
  • Amy: “I spent $20,000, which is absolutely insane. Nor did she ever deliver, for the record. But it’s that feeling of I better spend money to get these tax write offs or whatever.” (00:00, 25:49)
• Braden’s Regret: Setting up his S-Corp two years too early—didn’t save him money, created extra steps and cost when revenue wasn’t high enough.
  • Braden: “I just wasn't bringing in enough revenue consistently to pay my own salary. And then there wasn't enough money left over to actually have profit to save that self employment tax on.” (27:25)

8. End-of-Year Action Steps (30:04–31:38)

• Don’t spend for deductions’ sake. Only spend on genuine investments.
• Catch up on bookkeeping—you’ll recall more deductible expenses as you go.
• Retirement Savings: Open a retirement account before year-end, even if you make the contribution after January to get the current year's deduction.
  • Braden: “The account has to be open by the end of the year.” (30:49)

Notable Quotes & Memorable Moments

• Braden Drake
  • “If it sounds too good to be true, it probably is.” (10:23)
  • “Transparency is one of my core values. I do profit reports on my own podcast every month. So all of this is public. I'm on track to do about 400k this year…” (07:59)
  • “The IRS is the same with LLCs: they don't recognize LLCs. They don't exist. They don't know about them...you're just taxed as a sole proprietor in the eyes of the IRS.” (29:18)
• Amy Porterfield
  • “I was literally winging it...mailing somebody a refund check and a greeting card.” (00:53)
  • “So with that, are you suggesting that most of my listeners...should look into the llc but through S Corp?” (19:33)

Important Timestamps

| Segment | Timestamps | |----------------------------------|---------------| | Common mistakes | 04:00–06:00 | | Finance routines & habits | 06:51–09:03 | | Good/bad deductions | 09:03–13:40 | | LLC vs. S-Corp explained | 14:05–20:41 | | Case studies/real savings | 21:11–22:34 | | Payroll & paying yourself | 22:34–24:37 | | Biggest tax mistakes shared | 25:37–28:12 | | Year-end tax action steps | 30:04–31:38 |

Where to Find Braden Drake

• Website: notavglaw.com
• Threads/TikTok/Instagram: @notavglaw
• Podcast & Book: "Unfuck Your Biz"
  • As Amy says: “Go to this episode for all tax questions—it's going to live on!”

Tone & Closing Thoughts

True to Amy’s approachable, confessional style, the episode is funny, honest, and highly actionable, making intimidating financial decisions feel approachable and even empowering. Braden’s knack for clear explanations and memorable analogies demystifies taxes and LLC/S-Corp decisions, while Amy’s candid admissions make listeners feel less alone in their learning curve.

If you want to put your legal and tax “shit” in order, skip the panic-scrolling TikTok and bookmark this episode.