I hear this all the time from newer investors: “S corps never work for real estate.”

That’s too broad.

In plenty of situations, an S corp is not the right move. But in the right situation, it can create real savings. For more-than-2% S corp shareholders, the IRS says health insurance paid or reimbursed by the S corp is included in Box 1 for income tax purposes but excluded from Social Security and Medicare wages. The IRS also says S corp contributions to a 2%-shareholder’s HSA are deductible by the corporation, includible in the shareholder’s income, and then potentially deductible by the shareholder.

So when people automatically dismiss the S corp, I think they miss the bigger point: sometimes the right structure can save real money. If you had $30,000 of health insurance, $8,000 of HSA contributions, and $2,000 of accident or health-type coverage handled the right way, that is $40,000 potentially outside Social Security and Medicare wages. Using the 2026 Social Security and Medicare rates, that can mean up to about $6,120 in combined employer and employee payroll tax impact, depending on the facts and whether you’re already over the Social Security wage base.

That does not mean every investor should run out and elect S corp status. It does mean you should stop using blanket statements in tax planning.

Curious how many investors here have been told “never use an S corp” without anyone actually looking at their numbers first.