Each year, thousands of women start businesses across Mississippi, and most wrestle with the same two questions: How do I save money on taxes, and what structure do I need? If you’ve ever wondered the same things, meet Harper — a local candle maker whose journey can be a guide as we enter a new year and prepare for business growth.
STARTING AS A SOLE PROPRIETORSHIP
Harper started the way many of us do, with a kitchen-counter hobby and a few sales here and there. At that stage, earning under $50,000, a sole proprietorship made sense. No fancy paperwork — just candles, cash and the occasional, “Can you make this scent stronger?” comment from her sister-in-law.
CLARIFYING WITH AN LLC
But as orders grew, so did the confusion. Grocery money and candle money were having a little get-together in the same bank account, and tax season felt like a spotlight she did not request. That’s when Harper formed an LLC — a smart move once you’re consistently bringing in $20,000-$60,000 and need protection. An LLC didn’t save her on taxes yet, but it finally separated her personal life from her business life.
GLOWING-UP AS AN S-CORP
The real glow-up came when her profit hit $70,000-$100,000-plus. Wholesale accounts were calling, her brand was catching fire (in the good way) and she was tired of watching self-employment tax eat her alive.
That’s when Harper elected S-Corporation status. As an S-Corp, she paid herself a reasonable salary and took the remaining profit as distributions, which aren’t subject to self-employment tax. That simple shift saved her thousands annually.
SCALING UP TO A C-CORP
Years later, when national retailers and investors came knocking, Harper made her final evolution into a C-Corporation — the structure most women consider once they’re reaching multi-six figures, planning major growth or issuing stock.
No matter where you are in your business’s evolution, Harper’s story proves one thing: Your structure should fit your stage, not your starting point.
Melisa Taylor is an accountant, fractional CFO and QuickBooks expert. Reach her at (228) 224-3254 or melisadtaylor@melisad.com