Every creator gets told to “start an LLC” the second they land a brand deal. Most of them think it saves them taxes. It doesn’t. Here’s what each one actually does, and when it’s worth paying for.
First, the tax you’re actually paying
Creator income is self-employment income. On top of regular income tax, you pay self-employment tax: 12.4% for Social Security on profit up to $184,500 in 2026, plus 2.9% for Medicare on all of it. That’s 15.3% before income tax even starts. At a normal job, your employer pays half of that. As a creator, you pay both halves.
LLC: protection, not tax savings
A single-member LLC is taxed exactly like you with no LLC. Same income tax. Same 15.3%. What it gives you:
- A legal wall between the business and your personal assets
- A cleaner look when you sign brand contracts
- A reason to finally open a separate business bank account
Worth it for a lot of creators. Just don’t expect a smaller tax bill.
S corp: where the savings actually are
An S corp is a tax election, not a different business. You pay yourself a reasonable salary through payroll, and only that salary gets hit with the 15.3%. The rest of the profit comes out as a distribution without it.
Example. You clear $80,000 in profit. You pay yourself a $45,000 salary. The other $35,000 skips the 15.3%. That’s about $5,355 you don’t pay.
The catch is the cost. Payroll software, a separate business tax return, and usually a CPA. That can run a few thousand dollars a year. And the salary has to be reasonable for the work you do. You can’t pay yourself $10,000 and call the rest a distribution.
The simple rule
- Just starting or inconsistent income: stay a sole proprietor, or form an LLC for protection.
- Steady profit where the tax savings clearly beat the added costs: talk to a CPA about the S corp election.
One more thing. The 20% qualified business income deduction is now permanent, and an S corp salary reduces the income it applies to. A good CPA runs both numbers before you switch.
What I actually use: Fidelity for investing, the Amex Gold for everyday spending, and the rest on my What I Use page.
General education, not tax or legal advice for your situation. Figures are for 2026. Confirm with a CPA before electing S corp status.
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