Can I use Found as an S-Corp?

Yes, you can use Found as an S-Corp!

Found’s banking and bookkeeping solution is ideal for a wide variety of small business owners, across industries, business structures, and tax classifications.

As an S-Corp, you can use Found for our banking, bookkeeping, invoicing, and contractor management features, though some of our tax features (e.g. filing your taxes in-app as part of Found Plus** or seeing a real-time tax estimate) are only applicable to Schedule C filers.

What is an S-Corp?

An S-Corp is not a type of business incorporation, but rather a tax designation that eligible corporations or LLCs can elect with the IRS. Choosing to tax your business as an S-Corp may lower your tax bill, but keep in mind that there may be additional fees and paperwork.

Learn more: LLC with S-Corp Status: Could it Help You Save on Taxes?

How do I use Found as an S-Corp?

If your business is taxed as an S-Corp, here is a quick rundown of how to get the most out of your Found account, along with a few considerations to keep in mind.

The information on this article is not intended to provide, and should not be relied on, for tax advice. Please consult a tax professional as you set up these workflows for your specific business.

Use online banking

Add and move money

S-Corps can use all of Found’s banking features to deposit funds into their account, send payments to others, and more.

If you receive recurring payments from clients or platforms, you may be eligible to receive your funds up to 2 days early.*

Tip: For businesses who want to earn interest on their Found balance, consider signing up for Found Plus in order to earn 1.5% APY on balances up to $20,000.**

*Direct deposit funds may be available for use for up to two days before the scheduled payment date. Early availability is not guaranteed.

**Found's core features are free. Found also offers an optional paid product, Found Plus, for $19.99 / month or $149.99 / year. There are no monthly account maintenance fees, but transactional fees for wires, instant transfers, and ATM apply. Read more here.

Budget and save with Pockets

Within the Banking section, you can automatically set money into various sub-compartments, called “Pockets”, to save for various business needs. For S-Corps, this is a handy budgeting tool to ensure you’re setting aside cashflow for payroll, operating expenses, and your own salary. 

Learn more: Guide to Pockets

Keep your books organized

Track and manage your expenses

Found offers built-in bookkeeping tools to manage expenses, identify write-offs, and create rules to automate this work moving forward.

Tip: If you use a credit card for some business expenses, be sure to import those transactions using Found’s Connected Accounts feature, which is included as part of a Found Plus subscription. This helps you track all potential write-offs and report your total business expenses.

View business reports

As you earn income and categorize expenses, you can view real-time reports like a Profit & Loss, as well as income & expense breakdowns in your Reports section.

Share your activity with your accountant or bookkeeper

S-Corps who use an accountant or bookkeeper can easily share access to their Found account’s activity, reports, and documents with these collaborators. This can help them work together more effectively throughout the year and speed up tax preparation come tax time.

Learn more: How do I share access with my accountant?

Pay yourself and others

Pay yourself a salary

When you own a business taxed as an S-Corp, you can be paid in two ways: through a W-2 salary as an employee and through distributions of profit as a shareholder. 

First, the IRS says that you must pay yourself a “reasonable salary”, which is subject to both income taxes and self-employment taxes. You will need to do this through a payroll provider, such as Found’s preferred partner Gusto.

Learn more: How do I pay myself a salary as an S-Corp?

Pay yourself distributions

Typically, after your salary and business expenses, the remaining business profits can be paid out to yourself and any other shareholders as distributions. These are usually taxed as ordinary income on the recipient and therefore are not typically subject to self-employment taxes.

Use your Profit & Loss Report to get a real-time understanding of your profit, and then pay yourself with a bank transfer directly to your personal account.

 Learn more: How do I pay myself distributions as an S-Corp?

Pay 1099 contractors and employees

While Found is not a payroll provider, we do offer options for S-Corps to pay their people. You can use our contractor management tools to pay 1099 contractors and use a payroll provider, such as our preferred partner Gusto, to pay W-2 employees.

Learn more: Does Found offer payroll?

Stay on top of taxes

Ensure your tax profile is up-to-date

In your Tax profile within the Taxes section, make sure that your tax classification is set to S corporation. This will ensure that we only surface relevant tax features to you.

Set aside money for Taxes

Use Found’s “Taxes” Pocket to automatically set aside money for taxes when you earn income.

S-Corps can use this as a high-level estimate, though we recommend that they set their own custom taxes allocation based on their unique tax situation (i.e. their reasonable salary, distributions amount and frequency, etc.). The “Smart Percentage” option is only available for sole proprietors, whose estimated tax calculation is more straightforward based on their income, expenses, and other tax information in Found. 

File your taxes

S-Corps who choose to file their taxes themselves may be eligible for a discount through our partnerships with TurboTax and Town.

During filing season, navigate to the Toolkit section and select Tax filing to learn more about these options. 

Learn more: How do I file my taxes through Found?

Found partners with Column Tax and TurboTax, and is not a filing service. Restrictions may apply, see TurboTax and Town terms.

For a more detailed overview of how to get set up with your Found account, check out our Guide to Getting Started with Found and our collection of tutorial videos.