Frequently Asked Questions

Lettuce is a good fit for you’re dissatisfied with a manual accounting and focusing on deductions as tax strategy.

Lettuce is specifically for businesses-of-one based in the U.S., focused on selling services--consulting, creative work, software development, therapy, legal services are all great examples.

You can be set up as a sole proprietor or as an LLC and your business can be new or existing.

Lettuce is the only automated S Corp solution. No other platform offers this uniquely specialized guidance, and automates the work for you.

First, we exclusively specialize in taxes and accounting for businesses-of-one. Our recommendations are tailored to your needs, and personalized for each individual business based on what you earn, what you spend, and what your goals are.

Second, we do it all with modern technology. There is no off-shore accountant group involved, just a team of dedicated technology professionals, working hard to solve your challenges.

With Lettuce you can focus on running your business instead of spending your time on bookkeeping and accounting.

It takes about five minutes to provide Lettuce with all of the information that is needed to set up your business as an LLC, file your S Corp Election, and open your business bank account.

From there, Lettuce handles all of the paperwork and set up on your behalf.

Lettuce is simple and intuitive. There's no complex software to learn or complicated functionality, so you can focus on your business and not your accounting.

This depends a bit on how you want to run your business.

You can login as often as you like to look at your income and on how your deductions are being classified, or just check-in once a month.

Each quarter, you will have quarterly taxes to approve and pay, or you can choose to automate this with Lettuce.

Towards the end of the year, Lettuce will balance your salary and owner's distribution based on your total income, and prepare your business tax return for you to approve.

All of this takes minimal time, about thirty minutes every month.

Lettuce automates and streamlines financial tasks like bookkeeping, accounting, tax filing and payroll instead of doing them manually.

In addition, Lettuce works every day, to understand every dollar in your business. This enables us to be proactive about making recommendations and capturing every optimization.

Hiring freelancers is fine if you have an S Corp with Lettuce. These are people you'd pay with a 1099.

Lettuce does not support having W2 employees outside of immediate family members, like your suppose of children.

If you have a specific question about your scenario, just reach out at support@lettuce.co

You are free to end your Lettuce subscription at any time.

Your S Corp and LLC belong to you, even after you terminate your Lettuce subscription. You are still responsible for compliance and taxes of your business entity.

Discontinuing an S corp involves following legal dissolution procedures. You will need to submit a statement of revocation to the IRS service center where you file your annual return. You can find the IRS instructions here.

It depends if you're in the same line of business or not.

If you have two separate businesses with two separate customer-bases and subject matter, you should open two separate companies (LLC) and make and S-election separately for each. 

If both of you provide the same type of consulting to the same type of customers in the same subject matter, you can open one LLC), make one S-election, and have both spouses be owners.

Alternatively, you can have one spouse be the owner and the other be a contractor/employee of the business. Lettuce supports both of these options.

There is no setup fee for Lettuce; you can start using our services without any upfront costs.

Lettuce covers the cost for setting up your LLC, your S Corp, getting your EIN and opening your business bank account.

When you get paid and put those funds in your business bank account, you will start paying for your Lettuce monthly subscription.

Lettuce does not require a monthly payment until your business earns income. 

As an example, if you registered with Lettuce on November 15, had your business setup completed on December 15, and first get paid by a client on January 7, your first billing cycle would be January.

Your monthly fee is deducted directly from your Withholding account on the fourth Tuesday of every month. It is automatically categorized as a business expense and deducted from your taxes.

We are so confident in our work that if you don’t save on your taxes, we will refund your fees. To learn more, see our Guarantee page.

Lettuce costs $299/month. To break even using Lettuce, you need to be making about $65,000 a year.

Your savings will equal your tax deductible cost for using Lettuce. As your income increases, your savings will increase. Starting at around $70,000 your savings will exceed the cost of setting up and maintaining your S Corp with Lettuce.

Sole proprietorship is the default mode of many businesses-of-one. If you do nothing to officially set up your business with your state of operation, you file as a sole proprietor by default. Sole proprietorship is easy to maintain, but offers no liability protection or tax benefits.

An LLC takes some effort to set up and has some compliance requirements, and also offers you liability protection if you correctly separate your personal and business finances.

An S Corp is a tax status that you file with the IRS. It allows you to significantly reduce your self employment taxes (saving thousands), and also has some complex compliance requirements. Lettuce takes care of all of this for you.

To learn more, read our blog posts on the differences between sole proprietorships and LLCs, and on the benefits of S Corps.

Yes, you can switch from a sole proprietorship to an S Corp. Lettuce handles both the setup of your LLC and your S Corp election.

In order to have an S Corp, the IRS requires that you be first legally recognized as an LLC by your state of operation. The LLC legally to establishs your business, and offers personal liability protection. When electing to be taxed as an S Corp, your LLC can combine the liability protection with the tax benefits of an S Corp, optimizing both legal and tax advantages.

Your capital contribution is an investment used to start the business, covering initial expenses and establishing your financial commitment to the LLC.

Think of it like buying all the stock in your company. The money you deposit is yours to use.

This process can feel stressful, but doesn't have to be.

The name of your LLC is simply a unique name filed with your state government.

If the name you register is not the name you wanted, you can file a form with your state to create a DBA or "Doing Business As" name. This lets you use whatever name you like with clients.

First, Lettuce establishes your business as an S Corp, saving you thousands in taxes by significantly reducing your Social Security and Medicare tax payments. Instead of paying 15.3% self-employment tax on your total income, with an S Corp sets you only pay that tax on a portion of your income.

Lettuce also helps you maximizes your deductions, and ensures you take advantage of tax savings opportunities in areas like healthcare and retirement planning.

Lettuce continuously tracks and categorizes expenses. Every day, your Lettuce system evaluates every dollar in your business, ensuring you are able to maximize tax deductions all year round.

Instead of crunching at tax time, Lettuce is managing your taxes proactively every day, looking at every dollar of income and expense automatically.

Everything is kept updated in real time throughout the year, so that your balance with the IRS is as close to zero as possible. The work and anxiety around tax season disppears with Lettuce. When the time comes, we will send you all the info needed to file your tax return, including the business tax filing form 1120S and Schedule K1.

Additionally, Lettuce automatically sets aside money from each client payment for your quarterly taxes, making it simple to make your estimated payments.

We guarantee the accuracy of our work.

If our work is challenged by the IRS, we’ll be first in line to defend it at no charge to you. If you’re audited by the IRS, Lettuce will assist you through any audit. Lettuce will also refund you for any IRS penalty or interest, or any re-filing based on a discrepancy in any work we’ve done. 

You can read more about the Lettuce Guarantee, here.

Payroll is essential for S Corp owners to comply with IRS requirements. The IRS requires that you pay yourself a "reasonable salary" as an S Corp. You need to keep records of your payments, withhold the correct Social Security and Medicare taxes, and file and pay payroll taxes.

Lettuce takes care of all of this for you automatically.

You do not need a separate payroll solution when using Lettuce, it's already integrated into your Lettuce System.

S Corps can be started any time.

The financial benefits of an S Corp begin only after you make the election. If you are a sole proprietor, and establish your LLC and S Corp in June, you can only get the tax benefits from June forward. At year-end, your individual tax return for that year will show income as sole proprietor (Schedule C) for the first part of the year, and as a pass-through business entity (S Corp) for the second part of the year. Lettuce will take care of your business taxes from June on.

If you have an LLC already, you can set up your S Corp election at any time, and for that existing LLC, and Lettuce will take care of your business taxes from that point on.

Lettuce handles your business taxes and provides you with a W-2. This dramatically simplifies your tax return compared to filing as a sole proprietor or LLC.

If you have significant assets beyond your W-2, you may still want to consult with an accountant or CPA. If not, it will be easy to file using a standard service or filing with the IRS directly.

Lettuce sets you up with a free business bank account that can be easily accessed through your Lettuce dashboard.

You can view your statements, send and request invoices, transfer funds in and out, and more.

Lettuce partners with TransPecos Banks, N.A, Member FDIC, which insures your funds up to $250,000.

Lettuce requires that you use a business bank account we set up to deposit invoices, run payroll, and make tax payments.

This account allows Lettuce to separate your income into salary and owners distributions, as required by the IRS, and support your tax payments.

Once your salary and owners distributions have been deposited into the correct (and separate) accounts, you are free to transfer the money into your existing bank accounts.

Your Lettuce bank accounts support free transfers, always.

Yes, you can keep any business rewards credit card you have. You should only put business charges on that card and you should pay your bill with your bank account in Lettuce.

Payroll services that handle your "reasonable salary" portion of your S Corp are already integrated into your Lettuce system and handled automatically. 

We take data security and privacy extremely seriously at Lettuce. Lettuce ensures the highest security standards for your financial data, using encryption and secure protocols. Our approach to product development ensures our customers are in control of their data and that their information is safe at all times.

Additionally, our Lettuce guarantee provides assurance that your taxes will be accurate and that we'll defend our work if challenged by the IRS. Each bank account is FDIC insured up to $250,000.