111
votes
Accepted
The USA "self-employment tax dodge" mystery
You pretty much have it straight. In the first case, for 2017, She would have to pay 12.4% (social security) on 127,200 of salary and 2.9% (medicare) on the full amount. That would be $15,772, and $...
- 76.1k
18
votes
Accepted
Does paying down debt in an S Corp decrease profitability?
Someone else pointed out that this isn't how it works - paying down debt won't decrease profitability for tax purposes.
"Someone else" is correct. Principal payments on debt are not tax ...
- 47.2k
7
votes
The USA "self-employment tax dodge" mystery
On the surface I agree with the previous responses, however, since you are for tax purposes an employee, some states will require to you to carry workman's compensation insurance, and unemployment ...
- 71
6
votes
Accepted
What's the appropriate way to signify an S-Corp?
S-Corp is a corporation. I.e.: you add a "Inc." or "Corp." to the name or something of that kind. "S" denotes a specific tax treatment which may change during the lifetime of the corporation. It doesn'...
- 166k
5
votes
What's the appropriate way to signify an S-Corp?
Subchapter S Corporations are a special type of corporation; the difference is how they are taxed, not how they relate to their vendors or customers. As a result, they are named the same way as any ...
- 115k
5
votes
Accepted
What are the implications of lending money to my sole member S-corp?
You can make a capital contribution, not a loan. It's not a taxable event, no interest, and you can take a distribution later when the business has the money to pay you back. So yes, transfer the ...
- 24k
5
votes
LLC-SCorp to self - actually, does the corp pay payroll taxes?
In fact: does JoeCorp have to pay "payroll taxes" on that??
Yes. Any shareholder of an S-Corp with greater than 2% ownership must take reasonable compensation from the S-Corp as a W-2 employee, and ...
- 69.1k
5
votes
Adult Entertainment Taxes; Independent Contractor, SMLLC, LLC, S-corp, etc?
Being self employed is always a bit more complicated for loan underwriters because you don't have the proof of income from a third party, like a W2 and pay stubs from an employer. I've heard crazy ...
- 49k
5
votes
Accepted
What options are available if the IRS denies appeals for waiving missing form fee?
Disclaimer: I am not a lawyer. I am not an accountant. I am not even a U.S. citizen. This is not advice.
Aside from doing nothing and having the IRS pursue further enforcement actions against you and ...
- 31.7k
5
votes
What options are available if the IRS denies appeals for waiving missing form fee?
The right way to handle this situation is, "You can't charge me penalties because I acted on the advice of my CPA". That is Mr. X's "get out of jail free" card.
However, it sounds ...
5
votes
Can I 'reverse' an S Corporation distribution?
You're basically saying that you paid yourself the salary, but didn't pay the necessary payroll taxes. To avoid interest and penalties, you need to file an amended form 941 for that period (Form 941-X)...
- 166k
4
votes
Accepted
Why is K-1 business income taxed at 50%?
That's really not something that can be answered based on the information provided. There are a lot of factors involved: type of income, your wife's tax bracket, the split between Federal and State (...
- 166k
4
votes
Accepted
Health insurance deduction - better to buy through S-Corp or individually?
I ran this through my accountant and it's the same whether you do it through your company or as an individual. The only difference is the line number where it occurs.
- 651
4
votes
Accepted
What's the difference between S-corp vs LLC file as S-corp?
The difference between the two is subtle, and it a complicated mix of corporate law and taxes.
Company Types
First, let's talk about a company without going into taxes at all. A company is ...
- 7,506
4
votes
Accepted
Can you "expenses-in-a-corp V. standard deduction" in the USA?
Business expenses (deductions) offset business income, so no matter which type of pass-through business entity she is using (Sole proprietorship,LLC,S-Corp,Partnership), the expenses will offset her ...
- 69.1k
4
votes
End of year Tax for S-Corp holding January payroll
You should really talk to your accountant.
It's not clear what you're describing, you're talking about invoices and payroll in the same sentence, but they're not the same. If you get an invoice, it ...
- 166k
4
votes
Accepted
S-corp accounting and tax and accounting - buffer amount for early next year
This is an accounting question (which are generally off-topic), but it is relevant to individuals operating as S-Corps, so would probably be OK to answer here.
S-Corps are not allowed to have retained ...
- 166k
3
votes
LLC-SCorp to self - actually, does the corp pay payroll taxes?
As a 1099 contractor, the employee pays both halves of his FICA/social Security/Medicare tax (7.65% per half). As employee of his own S-corp, C-corp or LLC, the employee pays half and the employer ...
3
votes
Accepted
W2 employment paying into personal S corp
It kind of depends on your employer, my guess is it's not going to be possible. Essentially you'd like your employer to hire your company as a contractor.
The company you work for hires your S-Corp,...
- 49k
3
votes
Accepted
Reducing tax obligation for LLC electing S-corp taxation
First off, let's correct or clarify some of your assumptions about S-Corp taxation. Note these are basic simplifications and do take into consideration the various tweaks due to tax laws or income ...
- 47.2k
3
votes
Accepted
Can an S-Corp pay the sole owner/employee with a 1099?
No. S-Corp owners should be paid W2 wages and distributions. Here's a pretty good explanation as to why you can't use a 1099. Some notable quotes from the article:
IRS FS-2008-25 states that ...
- 47.2k
3
votes
What are the advantages of LLC over S-Corp?
Short Answer
I saw a video that mentioned that if you don't want to withdraw all
your company's net profit and want to invest it again on the company,
it's better to have a LLC over the S-corp. Is ...
- 719
3
votes
Accepted
How to Pay Yourself a Salary in a Single Member S-Corp with Inconsistent Income
...suggesting a weekly or bi-weekly payment that amounts to a pre-determined figure at year's end...
There is no rule that a salary be paid regularly.
As a single S-Corp owner, I had some years where ...
- 47.2k
3
votes
Can my S Corp pay my personal tax liability and can my S Corp be able to deduct the taxes?
can the S Corp pay for the taxes due?
Why? Why would the corporation, a separate legal entity, pay your personal obligations? Do you want to pierce the corporate veil? Because that's how you pierce ...
- 166k
2
votes
Fringe Benefits (Lodging) for single member S-Corp
None whatsoever, no. Moreover, trying something like that would very likely trigger a full audit.
- 166k
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