The $2,000 He Saved Cost Him $10,000 Later – When James launched his consulting business, he made a decision that felt smart: skip the legal complexity and file as a sole proprietor. No LLC. No S-Corp. Just a DBA and a green light to get to work.
“I’ll save on setup costs,” he thought. “Once I grow, I’ll deal with all that.”
But as the business picked up steam, and so did his revenue—James started feeling the weight of his decision.
The $2,000 He Saved Cost Him $10,000 Later
By the time tax season rolled around, James was in for a rude awakening. Without the structure and strategy of an S-Corp or LLC, he was missing out on thousands in legitimate deductions, stuck paying both sides of self-employment tax, and had no way to take advantage of smarter income-shifting strategies.
What he thought was saving him $2,000 in the beginning… ended up costing him over $10,000 in avoidable taxes.
The Entity Decision Isn’t Just Paperwork—It’s Strategy
At MSM Advisors, we’ve seen this mistake play out dozens of times. New business owners opt for the simplest setup—sole proprietorship—thinking it’ll “do for now.” But as the business grows, that decision can quietly become expensive.
The right business structure affects:
- How much you pay in taxes
- What you can legally deduct
- Whether you qualify for retirement or health plan deductions
- How you pay yourself and build wealth
- Your personal liability if things go wrong
When MSM Advisors Steps In
James eventually came to MSM Advisors—frustrated, overtaxed, and unsure how to fix it. Our team helped him evaluate:
- What entity best fit his revenue, risk profile, and goals
- How to restructure for future savings
- What deductions he had missed—and how to track them moving forward
- A long-term plan for both his business finances and his personal wealth
We helped him transition to an S-Corp, start paying himself strategically, and finally stop overpaying Uncle Sam.
The MSM Approach: Strategy from Day One
Whether you’re launching a startup in Lawrenceville or running a $10M+ company across Georgia, MSM Advisors works with you to make financial decisions that grow with your business—not slow it down.
We specialize in helping:
- Business owners who’ve outgrown DIY accounting
- Companies needing a higher-end level of financial strategy
- Owners managing both business and personal finances at once
Our team knows how to think five steps ahead—because what saves you money now should also serve you later.
Avoid James’s mistake. Don’t let short-term savings cost you long-term success.
Let MSM Advisors help you choose the right structure, the first time. Contact Us Today
While James is a fictional character, his situation is all too real. Stories like this unfold every day when small business owners make early decisions without the right financial guidance.
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