Who is this for?
-
✔️ Independent professionals earning $70K+
-
✔️ Interested in tax savings + compliant operations
-
✔️ Both new businesses and existing sole proprietorships
If you're working for yourself, this kit is for you.
This information is for educational purposes only and is not legal or tax advice. Consult with an attorney. S-Works provides software and self-help materials.
S-Corp Setup Checklist
1. Choose and Verify Business Name
-
Brainstorm a great name — then make it end in “LLC”, “L.L.C.” or “Limited Liability Company.”
-
Check name availability in the Texas SOS database: https://mycpa.cpa.state.tx.us/coa/
2. Register with the State of Texas
-
File Certificate of Formation (Form205) via SOSDirect: https://www.sos.state.tx.us/corp/sosda/index.shtml
-
The website is really old but it does work
-
Fee: $300;
3. Draft an Operating Agreement
-
Not required by Texas law but widely recommended.
-
This covers how your business operates
-
LegalZoom, Bizee, or a lawyer can help you do this.
4. Get an EIN from the IRS
-
Apply online:
https://sa.www4.irs.gov/modiein/individual/index.jsp -
Free, instant.
-
Use this for banking, payroll, and taxes.
5. Elect S-Corp Status
-
File Form 2553: https://www.irs.gov/forms-pubs/about-form-2553
-
File within 75 days of forming your LLC or starting the new tax year.
6. Register Locally in (Austin)
-
Business Personal Property if you have physical assets: https://www.traviscad.org/business-personal-property/
Optional: Assumed Name
-
Needed if you’ll use a public-facing name different from your LLC's legal name.
-
File a DBA with the County Clerk. For example: https://countyclerk.traviscountytx.gov/recording/assumed-business-names.html
7. Open a Business Bank Account
-
Use your LLC name + EIN.
-
Options: Mercury (https://mercury.com), Relay (https://relayfi.com), or a local Texas bank.
8. Set Up Bookkeeping
-
QuickBooks Online is a popular choice ($35+/month)
-
Other good options:
-
Xero; Puzzle; Wave
-
9. Determine Salary and Set Up Payroll
-
Determine an appropriate salary considering things like hours, responsibilities, profitability.
-
Document your rationale and determination.
-
Choose a payroll provider e.g. gusto.com ($55/month)
10. Pay Quarterly Tax Estimates
-
Federal Form 1040-ES
-
Due: Apr 15, Jun 15, Sep 15, Jan 15.
-
Pay online: https://www.irs.gov/payments/direct-pay
-
Texas has no personal income tax 🎉
11. TX Franchise Tax & Information Report
-
Required annually, even if no tax due.
-
File via the Texas Comptroller's eSystems portal: https://comptroller.texas.gov/taxes/franchise/
-
Free for businesses under $2.47M in revenue.
12. Stay Compliant (Forever-ish)
-
IRS 1120-S (March 15)
-
TX Franchise Report & PIR (March 15)
-
Federal Tax Estimates (Quarterly)
-
W-2 & Payroll Reports
Optional: Registered Agent
-
Required if you do not have a permanent and regular place of business in Texas.
-
Can be a good option for anyone desiring additional privacy
DIY vs. S-Works
Feature | DIY | S-Works |
|---|---|---|
Annual Taxes | 💸 | ✅ No additional cost |
Quarterly Taxes | 🤯 | ✅ Paid + Filed |
Ongoing Bookkeeping | 😬 | ✅ Fully managed |
Payroll Compliance | 😓 | ✅ Automated |
Entity Setup | ✅ | ✅ Done for you |