How $1M–$10M Owners Save Big (The Entity Strategy That Protects Six Figures)
How $1M–$10M Owners Save Big
(The Entity Strategy That Protects Six Figures)
The wrong entity can drain $60K–$200K+ in taxes every year. See how LLC, S-Corp, and C-Corp choices affect $1M–$10M businesses and how to switch for six-figure savings.
The wrong entity could be draining $60,000 to $285,000 in taxes every year — and most owners don’t even know it. Here’s how to stop the leak.
The quick take
Entity structure = profit control.
Wrong setup means higher taxes year after year.
Most entrepreneurs never revisit their entity after startup.
Switching from the wrong structure can unlock six-figure annual savings and protect millions over a decade.
The silent profit killer
1) Hidden cost in plain sight
Owners track payroll, marketing, and rent to the penny—but rarely know what their entity costs them in taxes.
2) Real story: David the roofer
$2 M revenue. Still an LLC eight years later. Result: $20K lost every year—purely from outdated structure.
3) The compounding effect
At $500K profit: ~$20K lost.
At $3 M: $100K+.
At $10 M: $200K+.
It’s compound interest in reverse.
Mini takeaway: If you haven’t reviewed your entity in 3+ years, it’s probably your single biggest money leak.
Why owners stay stuck
Habit & inertia
Most set up an LLC or S-Corp early—when revenue was $200K–$300K—and never look back.
Overlooked costs
Self-employment taxes, missed QBI deductions, and double taxation quietly drain profits.
The “nobody told me” gap
Many CPAs focus on compliance, not proactive tax strategy. Lawyers don’t model taxes. So nothing changes.
Mini takeaway: Your structure isn’t “set and forget.” It has to evolve with your revenue, goals, and tax law.
LLC vs. S-Corp vs. C-Corp: the three paths
Story 1 — Tom: The LLC Guy
$600K profit. Pays 15.3% self-employment tax. Total bill: $285K.
Story 2 — Sarah: The Smart Switch
Elected S-Corp, set a reasonable salary, takes distributions, rents her home to the business, employs her kids. Total bill: $125K.
Story 3 — Carlos: The Strategic Planner
Formed a C-Corp. Keeps profits inside at lower corporate tax rates, maximizes retirement plans, and plans an optimized exit. Total bill: $60K.
Lesson: Same revenue. Same profit. $225K difference every year—just from entity choice.
Mini takeaway: Entity structure is not paperwork—it’s profit control.
Build your entity strategy
1) Diagnose
Map revenue, profit, and long-term goals to the right entity mix.
2) Model the savings
Run side-by-side comparisons of LLC, S-Corp, and C-Corp taxes to see the multi-year impact.
3) Implement with precision
Time elections, adjust payroll, and document compensation to capture every deduction.
4) Review regularly
Update as profits grow and tax laws change to keep savings compounding.
At HavenStone we analyze more than 60 variables and design a multi-year plan, often putting $100K+ a year back into owners’ pockets.
Quick self-audit
Do you know exactly what your entity costs you in taxes?
Has it been more than 3 years since your last entity review?
Are you tracking QBI deductions and compensation planning?
Do you have a documented strategy for a future exit?
Two or more “no” answers = likely six-figure savings on the table.
Common questions
How often should I review my entity structure?
Every 2–3 years or whenever profit and goals change.
Is it hard to switch entities?
Not if done with proper elections and planning.
Will the wrong entity hurt my exit?
Yes. Without planning, you can lose 30%–50% of sale proceeds.
What to do next
Simple start: Share this article with your CPA and request an entity review.
Next level: Explore our Tax Strategies Guide for Business Owners for proactive steps.
Full service: and we’ll analyze your structure, run the numbers, and model multi-year savings.
The wrong entity is like having an employee steal from you every year. The right entity puts that money back in your pocket—fueling growth, freedom, and long-term wealth.