First Time - Single Member LLC Filing as an S-Corp

[pcow05]

I recently created a single member LLC and filed for it to be taxed as an S-Corp. I work as a freelancer (remotely from home, for the most part) in entertainment and would like to start being paid through this as opposed to being paid as a W2 employee or 1099 in some cases. I'm setting up a business bank account and aim to start getting paid through my LLC in the next few weeks. This is my first time doing this and I'm struggling to understand all of the tax requirements and implications. I'm hoping someone can help answer the following questions for me:

. When my paychecks hit my bank account, how should I go about paying myself? 

. How much should I leave in the account for taxes?

. Are there any additional fees I must pay each year as an LLC filing as an S-Corp?

. What purchases and expenses are eligible for write-offs? 

- Part of my mortgage since I work from home, internet, cable and streaming services since I work in entertainment, etc.?

. What are the pros and cons of operating as an LLC (with S-Corp tax status) as opposed to working as a W2 or 1099 employee?

Any help you can provide would be greatly appreciated. I really just want to make sure I'm making the right choice in utilizing the LLC as opposed to working as a regular employee and also want to make sure I'm adhering to all IRS and tax requirements.

Thank you!

[Mark_5]

Being taxed as a S-corporation, active shareholders are to be paid via payroll - W-2 compensation.  The IRS has the amount deemed to be what is considered "reasonable compensation" - the amount you would pay someone else to do  what you are doing for the business.  By processing the payroll, you will have the tax liability from the wages calculated.  For a company just starting out there might be limitations to income and you might have the question if should I pay myself a salary as an S-corp owner? 

Once a reasonable salary has been paid the shareholder-employee can take distributions and avoid payroll taxes on this amount.  A tax reserve on the distributions is suggested and if large enough you might need to make estimated income tax payments.

Normally there are no fees associated with the Federal tax return, state fees and taxes vary by state.  The reportable activity passes through to a individual(s) personal tax return.    

For deducting expenses related to the company, it should be related to the actual business activities.  It is important that the actual records, bank accounts, credit cards, assets, loans be in the business name and operations kept separately from any other person or business.  Organizational documents, receipts, agreements and all other records for the company kept separate and organized.  

For taking the home office deduction you can take a corresponding percentage of the expenses.

For the pros and cons of operating as a S-corporation as opposed to being self-employed.  After the payment of reasonable compensation, you would not have to pay the additional 15.3% in payroll taxes.  With respect to your state there could be additional savings there depending how businesses are taxed.   There are legal and liability protections, but you would need to ask a lawyer.