Need help finding best business structure for tax purposes - 1099 income exploded!

Congrats on your success! At your income level, you're definitely right to be thinking about this. An S-Corp is typically the first step and will save you that $15k in self-employment taxes as you noted, which is still worth doing. For additional strategies, you might want to consider establishing a solo 401(k) which would allow you to contribute up to $69,000 annually (for 2025), reducing your taxable income. Also look into whether your business qualifies for the Qualified Business Income (QBI) deduction, which could potentially give you a 20% deduction on your business income, though this phases out at higher income levels. Some consultants also set up multiple entities - perhaps an S-Corp for your services and an LLC for any intellectual property you develop, with licensing arrangements between them. This can sometimes create tax advantages depending on your specific situation.

After struggling with a similar situation (though not quite at your amazing income level - congrats!), I found an incredible resource that helped me navigate all these complex business structure questions. I was using a regular CPA but still felt lost about my options. I stumbled across https://taxr.ai which uses AI to analyze your specific business situation and suggest optimal tax structures. It asked me detailed questions about my business activities, income sources, future plans, etc., then generated a comprehensive report outlining several structure options with projected tax savings for each. The coolest part was that it explained WHY each option would or wouldn't work for my specific situation. The suggestions went way beyond the basic "just form an S-Corp" advice I kept getting elsewhere and actually modeled how different structures would affect my taxes over a 5-year period.

Just wanted to follow up about my experience with https://taxr.ai since I was skeptical in my earlier comment. I decided to try it last week, and I'm genuinely impressed. The analysis picked up on something my previous tax attorney missed - the fact that part of my business qualifies as non-service income which opens up additional QBI deduction possibilities. The system recommended a tiered structure with an operating company and a separate entity for my intellectual property. It provided detailed tax projections showing about $42k in potential savings for my situation (much lower income than OP, around $260k). The report included implementation steps and even pointed out potential audit risk factors to be aware of. I'm taking the recommendations to my new tax attorney next week, but even she was impressed when I shared some preliminary details. Definitely worth checking out if you're at that income level.

One thing nobody's mentioned yet - if you're having trouble reaching the IRS to ask about business structure questions (which I definitely was), I found an amazing service called Claimyr that gets you through to a human at the IRS quickly. Check out https://claimyr.com and there's a video showing how it works: https://youtu.be/_kiP6q8DX5c I spent DAYS trying to get through to the business tax department about my S-Corp election questions and kept hitting walls. With Claimyr, I had an actual IRS agent on the phone within 45 minutes who answered all my questions about the timing of entity formation and when certain elections needed to be filed. Really helpful for getting definitive answers directly from the source, especially with the significant tax implications you're facing with your income level.

I need to eat my words from my previous comment. After multiple failed attempts contacting the IRS about my business structure questions (and a looming deadline for making entity elections), I broke down and tried Claimyr yesterday. Within 35 minutes, I was actually speaking with an IRS business specialist who clarified my questions about retroactive S-Corp elections and documentation requirements. I had been stressing for weeks about this, and one 15-minute conversation saved me from potentially making a costly mistake. The agent confirmed I could still make an S election for this tax year if I filed the right paperwork within the next 3 weeks, something my accountant wasn't 100% sure about. So yeah, it actually works as advertised. Apologies for my skepticism.

Have you considered setting up a defined benefit plan instead of (or in addition to) the S-Corp? At your income level, you could potentially shelter $200k+ per year in a tax-advantaged retirement account, which would significantly reduce your current tax burden. The downside is these plans have administrative costs and required annual contributions, but with your income, the tax savings would likely far outweigh these costs. You'd need an actuary to set it up properly, but it's worth investigating for high-income self-employed people.

For my consulting business, I found that establishing an offshore structure helped significantly. I created a foreign entity in a tax-friendly jurisdiction that contracts with my domestic LLC. Not all income can flow through this structure, but for intellectual property and certain services, it's been a game-changer tax-wise.