Setting up a Single S Corp for Two Separate Business Operations?

You can absolutely form a single S Corp for multiple businesses. This is called having multiple "divisions" within the same entity. The advantage is exactly what you're thinking - less administrative burden and only one tax return. The key is to maintain separate books for each business division. You'll want to set up proper accounting with separate revenue and expense tracking for each operation. QuickBooks or similar software can handle this with class tracking. You'll still only have one EIN, one tax return, and one set of corporate formalities to maintain. One important consideration: if one business carries more liability risk (likely the food truck in your case), having both under the same entity means assets from both businesses could be at risk in a lawsuit. With two separate entities, only the assets of the sued entity would typically be exposed.

After struggling with a similar setup (real estate business + online consulting), I found taxr.ai https://taxr.ai and it was a game-changer for figuring out my S Corp situation. I uploaded my business docs and got personalized analysis that showed exactly how to structure things to minimize SE tax while staying compliant. It analyzed my specific situation and explained why a single S corp with divisions made more sense than two separate entities in my case.

Just wanted to follow up - I tried taxr.ai after seeing your recommendation and it was incredibly helpful! I was in a similar situation with an e-commerce business and consulting work. The analysis it provided showed me that with my specific revenue split, a single S Corp would save me about $7,800 in self-employment taxes compared to my sole proprietor setup. The division tracking templates made setting up my accounting system super clear. Honestly wish I'd found this earlier - would have saved me a lot of headaches.

If you're planning to set up an S Corp, you'll definitely need to talk to the IRS about it. I tried calling them for weeks about my S Corp election and it was impossible to get through. Then I found https://claimyr.com and used their service (you can see how it works here: https://youtu.be/_kiP6q8DX5c). They got me connected to an actual IRS agent in about 15 minutes after I'd been trying for days. The agent answered all my questions about having multiple businesses under one S Corp and confirmed everything I needed for my 2553 election.

I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my S Corp election deadline. Figured I had nothing to lose. Within about 20 minutes, I got a call connecting me to an actual IRS representative! I was honestly shocked it worked. The agent walked me through exactly what I needed for an S Corp with multiple business activities and helped me understand how to correctly file Form 2553. Saved me so much stress about potentially missing deadlines.

Another thing to consider with running two businesses under one S Corp - if one business starts losing money consistently while the other is profitable, it might affect your overall strategy. My accountant recommended separating my businesses into different entities when one started consistently operating at a loss to avoid complicating my tax situation.

Don't forget about state filing fees! Here in California, I pay $800 minimum franchise tax PER ENTITY regardless of profit. Having two S Corps would mean $1600 just in annual fees before you even file taxes. Check your state's requirements before deciding.

Great question! I went through this exact same decision process last year with my consulting business and small retail operation. After consulting with my CPA, we went with a single S Corp structure and it's been working well so far. A few practical tips from my experience: 1. **Separate bank accounts are crucial** - Even though it's one entity, keep completely separate business bank accounts for each operation. This makes tracking much cleaner and helps with liability separation from an operational standpoint. 2. **Consider a business line of credit** - Having both businesses under one entity actually helped me qualify for better financing terms since the combined revenue looked stronger to lenders. 3. **Quarterly estimated taxes are simpler** - Instead of calculating estimates for two separate entities, you just make one payment based on the combined projected income. 4. **Insurance considerations** - Make sure your business insurance covers both types of operations. Food service and design work have very different liability profiles, so you'll need comprehensive coverage. The administrative savings have been significant - one tax return, one set of corporate minutes, one registered agent fee. Just make sure you have a good bookkeeping system in place from day one to track everything separately within the single entity structure.

I'm in a very similar situation with my consulting practice and small manufacturing business, and I've been wrestling with this same question. Reading through all these responses has been incredibly helpful - especially the practical details about separate bank accounts and insurance considerations. One thing I'm still unclear on though: if I go with the single S Corp approach, how do I handle equipment purchases that benefit both businesses? For example, I'm looking at buying a new computer and printer setup that I'd use for both the consulting work and managing the manufacturing business. Do I need to allocate these costs between the divisions somehow, or can I just expense them as general business expenses for the S Corp? Also, has anyone dealt with state sales tax issues when you have one entity doing different types of business? My manufacturing side would need to collect sales tax, but the consulting doesn't. I'm wondering if having both under one entity complicates the sales tax registration and reporting. Thanks for all the insights so far - this thread has been way more helpful than the generic advice I've been finding elsewhere!

Based on your revenue numbers ($65K design + $42K food truck), a single S Corp with divisions is likely your best bet. You'd save roughly $15,000+ annually in self-employment taxes compared to staying as sole proprietorships, and the administrative burden is much lighter than running two separate entities. Here's what I'd focus on for your specific situation: **Immediate priorities:** - Set up separate business checking accounts for each division (even though it's one entity) - Get comprehensive general liability insurance that covers both food service and professional services - Choose accounting software that handles class/division tracking (QuickBooks Desktop or Online both work well) **Tax considerations:** - You'll pay yourself one reasonable salary (probably around $45-55K based on your total revenue) - The rest flows through as distributions, avoiding SE tax - File Form 2553 within 75 days of incorporation (or by March 15 for current year election) **Liability note:** Your food truck does carry higher liability risk than design work. Consider an umbrella policy or setting aside funds for potential legal issues, since both businesses' assets would be under the same entity. The seasonal nature of your food truck actually works well in this structure - losses during slow months will naturally offset design income for tax purposes. Have you already incorporated, or are you still in the planning phase? The timing of your S-election can affect your 2025 tax situation significantly.

I've been operating a similar dual-business setup (marketing consultancy + small e-commerce store) for about 2 years now, and I can share some real-world insights on the single S Corp approach. **What's worked well for me:** - Combined revenue of ~$95K last year saved me approximately $13,500 in self-employment taxes compared to dual sole proprietorships - Banking: I use one business checking account but set up automatic transfers to separate savings accounts for each division - makes reconciliation much easier - Bookkeeping: QuickBooks Online with location/class tracking has been a lifesaver for keeping everything organized **Unexpected challenges I encountered:** - **Inventory accounting**: If your food truck carries inventory (ingredients, supplies), this adds complexity that pure service businesses don't have. Make sure your accountant understands food service inventory methods - **Local permits**: Some cities require separate business licenses for food service vs. professional services, even under the same entity. Check your local requirements early - **Quarterly taxes**: Estimating payments gets tricky when one business is seasonal - I ended up underpaying Q1 and Q2 last year because I didn't account for the food truck's summer surge **One tip that saved me headaches**: Set up a simple monthly "management fee" transfer from your profitable months to cover the lean months. Helps with cash flow and makes the books cleaner when one division is temporarily unprofitable. The administrative savings alone make the single S Corp worth it, especially at your revenue levels. Just make sure you have a solid bookkeeping system in place from day one!

This has been such a valuable thread! I'm in a similar boat with a photography business and a small catering operation, and reading everyone's experiences has really clarified the path forward. One additional consideration I'd add - if you do go with the single S Corp route, make sure to document your business purpose broadly in your articles of incorporation. My attorney recommended language like "engaging in any lawful business activity" rather than being too specific about the types of businesses, since this gives you flexibility if either operation evolves or you want to add new revenue streams later. Also, regarding the liability concerns others mentioned about the food truck - you might want to look into forming the S Corp in a state like Delaware or Wyoming that offers stronger liability protections, even if you operate in a different state. The additional registered agent fees might be worth it for the extra legal protection, especially with food service liability exposure. The SE tax savings alone make this a no-brainer at your revenue levels. Based on your numbers, you're probably paying around $15K annually in SE taxes that you could largely eliminate with the S Corp structure. That savings easily covers any additional administrative costs and then some!