The loan-out, minus the sales pitch.

A loan-out is a little company (almost always an S-corp) that owns exactly one thing: you. When you book a job, the production hires the company. The payroll company pays the company — no withholding, the whole check. Then YOUR company pays YOU a salary and picks up the tab for running your career.

That little detour is the whole trick, and it buys two things. One: your write-offs come back. Since 2018, W-2 performers can’t deduct commissions, classes, or dues federally — but companies deduct their business expenses just fine, and through a loan-out that’s exactly what those costs become. Two: payroll-tax planning — the company pays you a reasonable salary and can hand you the rest without self-employment tax on top.

Here’s the part the party conversation skips: you now own a company, and companies are needy. Formation paperwork. A payroll service so your company can pay you like an employer. Its own tax return every year. Registered-agent fees. And state charges — California bills $800 a year just for the privilege of existing. Budget four figures annually before you see dollar one of benefit.

Two traps worth knowing by name. “Reasonable salary” is a real IRS rule, not a vibe — paying yourself $20,000 on $400,000 of bookings is how audits start. And states keep changing their minds about loan-outs (California especially has poked at them lately), so this is a structure you run WITH a professional. Not from a blog post. Including this one.

The costs are flat; the benefits grow with your income. That’s the whole equation. Below high, steady six figures, the company mostly eats its own savings. Above it, the restored write-offs and the payroll planning start compounding, and the “Inc.” earns its keep. The honest rule of thumb: when your commissions alone cost more than a company would cost to run, it’s time to sit down with a professional and your real numbers. WorkMade watches your income and taps you on the shoulder when that day comes.