Some other CPA's can confirm this stuff..... and I wish someone would pay me for this.....(i am unemployed ya know!!)

-----if you are self employed and are making decent $ ($40k+), you may want to switch to a S-Corp, and pay yourself a "nominal, but reasonable" salary, then have the remaing income paid to yourself in "withdrawls".....

----- Basically for your federal taxes your current situation makes you pay self employement taxes all the up to $7X,XXX. if you switch to an S-corp, you will be paying basically the same taxes on your payroll, but will avoid it on anything above that.

example

- make $70k net Self employed
- switch to S-corp, pay yourself $40k in payroll --- you will save about 15% on the $30k of remaining income...$4500..(you will have to pay an accountant to do the S-corp tax return, but your personal return should be less now).

Some local districts allow the $30k of S-corp income to not be taxed as "income" as well, allowing for additional savings.

did all that makes sense.... my Apartment buying partner is Self employed and did not know this stuff, so........ he does now!

Scot

 

if my s-corp actually made money, i'll try that

 

From Pennsylvania to Alaska, now you're in Louisiana and Missouri at the same time? Talk about an identity crisis.

 

I recently (1 year) took the dive and went on my own, I do IT services, however for the time being it is to my advantage NOT to Incorporate.... I haven't been doing to well lately due to vacation season, I'll see how it goes in the future...

 

When it comes right down to it, i am actually from INDIANA, PA...

Scot - originally born in Winston-Salem, NC...... now unemployed.

[QUOTE]Originally posted by turbo_pwr
[B]From Pennsylvania to Alaska, now you're in Louisiana and Missouri at the same time?

 

I have been Inc. for a long time
I don't even get 1099's when it's corp to corp

 

I'm self employed and joined an s-corp. You can actually get some good benefits too by becoming an s-corp.