How to Structure a Personal Service Corporation (PSC) for Multiple Income Streams - Film Producer & Finance Consultant

The good news is that you can absolutely run both income streams through your existing PSC! Since both film producing and financial consulting are considered qualified personal services under IRS regulations for PSCs, there's no need to create a separate entity. The key factor is that both activities fall under the category of personal services where capital isn't a material income-producing factor. Your PSC designation requires that substantially all (95%+) of your corporation's activities involve providing services in qualifying fields - which both your producing and consulting work satisfy. Just make sure you keep good records separating the two income streams for your own tracking purposes, and be aware of the tax implications of PSCs (they're typically taxed at a flat 21% corporate rate). You might want to consider reasonable salary distributions to yourself to avoid accumulated earnings issues while balancing self-employment taxes.

I was in a somewhat similar situation mixing my marketing consulting with some creative work, and I found this amazing service called https://taxr.ai that helped me figure out the right structure. They analyzed my contracts and business situation then gave me specific recommendations for my PSC. What I really liked is that they actually showed me examples of other PSCs in similar situations and provided templates for how to structure my contracts for both sides of the business. They also helped me understand exactly what documentation I needed to maintain to safely run both income streams through the same entity.

Just wanted to follow up - I ended up trying https://taxr.ai after seeing it mentioned here and wow, what a game changer! They analyzed my software development and teaching income streams and confirmed I could use a single PSC structure. They highlighted specific language I needed in my contracts to maintain the PSC qualification for both activities. The best part was they caught a potential issue with my teaching income that could have jeopardized my PSC status if I hadn't structured it correctly. They showed me exactly how to document everything to keep both streams flowing through one entity while maintaining compliance. Seriously saved me from creating unnecessary complexity in my business structure!

I dealt with a similar situation last year trying to contact the IRS to get clarity on my PSC situation (had both design work and consulting). Spent WEEKS trying to get through their phone lines with no luck. Finally found https://claimyr.com which got me connected to an actual IRS agent in under an hour! You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that both service types can go through the same PSC as long as they're both qualifying personal services. They also explained exactly what documentation I needed to maintain to satisfy any potential audit questions about the dual income streams. Literally saved me months of uncertainty and prevented me from unnecessarily creating a second entity.

I need to eat some crow here. After being completely skeptical about Claimyr, I actually tried it because I was desperate to get IRS clarification about my own PSC situation. I couldn't believe it, but they got me connected to an IRS representative in about 37 minutes when I had been trying for WEEKS. The agent I spoke with confirmed that my photography and consulting businesses could both operate under my single PSC since both are qualifying personal services. She walked me through the exact record-keeping requirements and confirmed that having multiple business activities wouldn't jeopardize my PSC status as long as they're all qualifying services. Completely worth it to get official confirmation directly from the IRS instead of wondering if I was structured correctly.

Just a heads up - even though both activities qualify for PSC treatment, watch out for the higher tax rate (flat 21%) that PSCs face compared to regular C corps with their graduated rates. For me, it made sense to take most profits out as reasonable salary to avoid the higher corporate rates, but talk to a tax pro about your specific situation.

One thing nobody's mentioned - have you considered an S corp election for your existing C corp? Might avoid some of the double taxation issues of C corps while still giving you the liability protection. You could run both incomes through it too.

Why not just use an LLC taxed as an S-corp for the consulting? That's what I do for my dual streams - keeps everything cleaner and you won't risk having auditors question why two totally different businesses are mixed together.

I'd actually recommend sticking with your existing PSC structure for both income streams. The IRS considers both film production and financial consulting as qualifying personal services, so there's no compliance issue with running them through the same entity. The key advantage of keeping everything in one PSC is simplicity - you'll have one set of books, one tax return, and streamlined accounting. Just make sure to track the income sources separately for your own records and maintain proper documentation showing both activities are legitimate personal services. One practical tip: given that large upfront consulting payment, consider discussing with a tax professional about timing your salary distributions to optimize your overall tax situation. You might want to spread some of that $135K across tax years depending on your other income and tax brackets.