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111 votes
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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 $...
Pete B.'s user avatar
  • 76.7k
18 votes
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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 ...
TTT's user avatar
  • 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 ...
pochteca's user avatar
6 votes
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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'...
littleadv's user avatar
  • 176k
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 ...
Ben Miller's user avatar
  • 116k
5 votes
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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 ...
Rocky's user avatar
  • 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 ...
Hart CO's user avatar
  • 70.5k
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 ...
quid's user avatar
  • 49k
5 votes
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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 ...
Chris W. Rea's user avatar
  • 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 ...
Harper - Reinstate Monica's user avatar
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)...
littleadv's user avatar
  • 176k
4 votes
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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 ...
minou's user avatar
  • 7,536
4 votes
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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 ...
Hart CO's user avatar
  • 70.5k
4 votes
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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.
Lloyd Banks's user avatar
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 ...
littleadv's user avatar
  • 176k
4 votes
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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 ...
littleadv's user avatar
  • 176k
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 ...
Harper - Reinstate Monica's user avatar
3 votes
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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,...
quid's user avatar
  • 49k
3 votes
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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 ...
TTT's user avatar
  • 47.2k
3 votes
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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 ...
TTT's user avatar
  • 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 ...
ohwilleke's user avatar
  • 719
3 votes
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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 ...
TTT's user avatar
  • 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 ...
littleadv's user avatar
  • 176k
2 votes

Multi-state K-1 earnings to S-Corp

I'm not sure why you think that it matters that the distribution goes to an S-Corp vs an individual tax payer. You seem to think it has any relevance to your question, but it doesn't. It only confuses ...
littleadv's user avatar
  • 176k
2 votes

Buying car as S-corp

The best way to do this is to pay for the entire car, including gas, insurance, and repairs, from S-corp funds, then meticulously track how many miles are used for personal and how many miles for ...
NL - Apologize to Monica's user avatar
2 votes

What's required to claim "pass-through entity" tax rates, for a sole proprietorship under 2018 IRS tax rules?

Under the 2018 USA tax plan, I understand that "passthrough" entities are offered the same tax rate as corporations. First, your understanding is slightly off, corporate tax rates under the new law ...
Hart CO's user avatar
  • 70.5k
2 votes
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Can I turn myself into a pass-through corporation in order to save money on income tax?

I am not an accountant, so I do not know whether or not this made it through to the final bill, but IIRC, not all professions are eligible for the deduction. According to this article, the IRS might ...
Rob Rose's user avatar
  • 286
2 votes

The USA "self-employment tax dodge" mystery

You are fundamentally wrong. The self-employment tax is actually not really a tax per se. It is the part of your FICA taxes that ordinarily would be paid by the employer. The ordinary FICA tax rate ...
Kevin Keane's user avatar
2 votes

What taxes are involved for LLC in Georgia?

Your best course of action is to gather your paperwork, ask around your personal network for a recommendation for a good CPA, and pay that person to do your taxes (business and personal). Read ...
Xalorous's user avatar
  • 2,865

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