For some AFH owners, an S-corp election lowers self-employment tax year after year. For others, especially owners who live in the home, it can cost more than it saves. Find out which one you are before anything gets filed.
No charge for the consultation unless you decide to file. Payroll for 145 Washington adult family homes today.
Most S-corp advice is written for consultants and contractors. Three things make the decision different for an AFH owner.
If you live in the home with Medicaid residents, some of those payments may fall under the difficulty-of-care exclusion (IRS section 131). How the business is set up matters to that. It has to be weighed before an S-corp, not after.
An S-corp owner who works in the business must take a reasonable wage. For an AFH owner that means real duties: caregiving hours, administration, on-call nights. The number needs a written basis.
Changing the legal form of the business that holds an AFH license is a change of ownership to DSHS. That belongs in the decision from the start.
An owner who does not live in the home, with $120,000 of profit before paying herself.
Getting started is a one-time $450 for the consultation and filing the S-corp election. You only pay if you file. One more trade-off we go through with you: a smaller paycheck also means smaller Social Security credits for retirement.
Run this on my homeIllustration only. Rounded federal figures and 2026 Washington premium rates. The paycheck must be reasonable for the work you do.
Want your first S-corp paycheck in January? The time to decide is this fall, so payroll is ready on day one.
Your profit, whether you live in the home, the difficulty-of-care exclusion, how your license is held, and how many owners there are.
Your own numbers side by side, a salary figure with its basis, and our reasoning. Where the rules are not settled, we say so.
If you decide to go ahead, we prepare and file Form 2553 and line up the start date with your payroll calendar. This is the only point the $450 is due.
You go on the same payroll as your caregivers.
If an S-corp fits, the savings depend on an owner paycheck that runs correctly every month. If it does not fit, your caregivers still need to be paid correctly, with the deposits and filings behind it. Either way, that is the work we take off your hands.
Payroll for an adult family home is a flat $100 a month. No charge per employee, so adding yourself to payroll does not raise your bill.
Start with a consultationLeave your name and number and we will reach out to set up your consultation. We go through your numbers together and give you our recommendation in writing. You only pay if you file. Prefer to message first? WhatsApp us on 206-840-6149.
Illustrations on this page are general information, not tax advice for your specific situation. CarebearBooks is a brand of NSBC LLC, Issaquah, WA.
Not automatically. But if part of your Medicaid income may qualify for the difficulty-of-care exclusion, restructuring can affect it. We look at that first and the S-corp second.
A wage in line with the work you actually do in the home, paid before you take other money out. We build it from your duties and hours and put the reasoning in writing.
Not necessarily. The IRS has a relief procedure for late elections when certain conditions are met. We check whether it fits your situation.
If your license is already held by an LLC or corporation, the S-corp election is a tax change only, and your license stays as it is. If your license is in your own name, there is a step first: moving an AFH license to a new entity means a new license application with DSHS and advance notice to residents. We map out that cost and timing before recommending anything.
Financial care for caregivers
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