employee of own company??

junker1

Roundtable Host 2009
corporation, llc, sole proprietor, s.corp which one allows me, the owner of said company to be a employee.
 

JBurd

New member
S. Corp requires that you pay yourself a reasonable wage as an employee (subject to same tax withholdings as other employees), but then on the profit that you keep above that you don't have to pay any ss, medicaid/care taxes. Saves me thousands in taxes. I still elect to be excluded from work comp insurance.
 

Mark 8262

Residential and Commercial Pressure Washing Specia
Doesn't the company still have to pay the matching SS on the payroll plus unemployment
 

JBurd

New member
Doesn't the company still have to pay the matching SS on the payroll plus unemployment

Yes it does, but if you aren't an s-corp you are paying both halves of it anyway. The state unemployment insurance is an additional tax on part of your income (the reasonable wage) that you don't have if you aren't taxed as an s-corp. For me the savings was in the thousands and the costs in the hundreds.
 

Christopher

Moderator
Is there a gross income minimum to move to an S-Corp or LLC ? I was told my a source that I don't think is reliable that you have to be grossing almost a million per year to move to S-Corp or LLC.
 

junker1

Roundtable Host 2009
I really need to sit down with someone that can help me find the best way for me to keep most of my income.
 

Scott Stone

New member
Pay the money, and talk to an accountant. One that is actually practicing and deal with this stuff. Sometimes you have to pay the pros to be the pros.
 

junker1

Roundtable Host 2009
Pay the money, and talk to an accountant. One that is actually practicing and deal with this stuff. Sometimes you have to pay the pros to be the pros.

Lawyer and accountant. Realize that I will have to deal with both of them at some point in the next 6 weeks.

I have done the best I could searching on the internet which by the way was a waste of my time lol
 

Ralph Q

New member
Is there a gross income minimum to move to an S-Corp or LLC ? I was told my a source that I don't think is reliable that you have to be grossing almost a million per year to move to S-Corp or LLC.
I am an LLC and I am not making a million yet. Going to S Corp next year.
 

Ralph Q

New member
I am doing business as a sole proprietor right now( still an Llc) so I am considered a manager/managing partner. I guess. I will be switching to an S corp next year. That's when I will draw a paycheck.
 

Michael DeRose

New member
You can also take a draw and pay your quarterly income tax on your states irs website. I am llc and I cut myself a paycheck. It all works out the same and it's much easier. My accountant said it's not really ideal but it works out in the end to be the same as a draw.
 

flanbo

New member
Yep taxes sucked this year. It was nice getting a return for a few years. The new hvac system will have to wait a couple months. Always paid myself a salary when remodeling and the accountant did his magic with the earned income tax credit. There was a lot of cash to make things work thou. Soon as I started in state work the numbers just wouldn't work in my favor. Taking a paycheck will save your ass if you get lazy a couple of quarters. Call it safety money in the bank
 

DunRite

New member
Its what works best- i am an LLC and draw a check whenever i want as opposed to a weekly payroll check like my guys

I pay qtrly estimated taxes to cover the taxes- it works for me
 
Both LLC and S-Corp are pass-thru taxation. S-Corp requires an application with the IRS and I had $0 revenue when I formed my holding company as a Sub Chapter Corp... You will need corporate by-laws, annual reports issued to your state, etc though. Which sounds alot more complicated than it is. Really its quite simple.

My preference is S-corps because you can avoid self employment tax if you're racking in some cash after you pay yourself a "reasonable salary" which the IRS does not define. we see salary as 50-80% of profit, and the balance "dividend" is not subject to self employment tax.

A great resource for general small business info is SBA.gov. An attorney will cover any start up info and get your liability buttoned up.
 

Rodger

New member
If you ever sell your company you will be taxed earned income for the profits on an LLC. If you sell a S-Corp it's capital gains.
 
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