If you've been scrolling through the finance side of any social media platform recently, you've likely had someone tell you to go get an S Corp. But the worst thing you can do is go get one just because someone told you to.

So how do you know when you're ready for an S Corp? I'm going to walk you through this. One of the barebones requirements for electing S Corp status is having a preexisting entity. Then you need to be asking yourself if you're profitable. Are you making at least $50,000 a year after expenses? If you do, great! Do you also have good financial hygiene? I'm talking solid bookkeeping, documentation, and keeping personal and business expenses separate. If you've got all of that, the last thing you need to do is be sure that you're current and compliant on all of your tax filings.

* Related episodes:

196. How to Handle Suspicious Tax Pros

201. How to Deduct Medical Costs and Self-Employed Health Insurance

204. Live Q&A: Will Anyone Actually Buy My Offer?

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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.