Foundation Repair Business: S-Corp vs. Sole Proprietorship Tax Comparison

Foundation repair S-Corp analysis:

Industry characteristics:

• Revenue per crack injection: $500-$2,000
• Revenue per pier installation (6-12 piers): $8,000-$20,000
• Revenue per waterproofing project: $3,000-$10,000
• Revenue per mudjacking/polyjacking: $1,000-$5,000
• Materials: 20-30% of revenue (piers, epoxy, foam, waterproofing membrane)
• Workers’ comp: 7-12% of payroll
• Licensing: general contractor or specialty license required in most states
• Lead generation: heavily referral-based, plus Google Ads and HomeAdvisor

NOT an SSTB: Foundation repair is a construction trade. Full QBI deduction available at all income levels.

S-Corp break-even (at 9% workers’ comp):

At $100,000 net profit:

• Sole prop SE tax: $14,122
• S-Corp: salary $50,000, WC $4,500, employer FICA $3,825, payroll $1,200, return $1,000
• S-Corp total: $10,525
• Savings: $3,597

At $150,000 net profit:

• Sole prop SE tax: $21,186
• S-Corp: salary $60,000, WC $5,400, employer FICA $4,590, payroll $1,200, return $1,000
• S-Corp total: $12,190
• Savings: $8,996

At $250,000 net profit:

• Sole prop SE tax: $27,370 (Social Security cap applies)
• S-Corp: salary $75,000, WC $6,750, employer FICA $5,738, payroll $1,200, return $1,000
• S-Corp total: $14,688
• Savings: $12,682

Break-even: approximately $65,000-$80,000 net profit. Foundation repair operators frequently exceed this in their first or second full year of operation because of the high per-job revenue.