- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Business & farm
Out of curiosity, why did you set up the business as an S-corporation?
I suspect that the corporation and its required payroll and paperwork is going to cost you more time and money than it saves. Without knowing your entire situation, my first thought is that a Single Member LLC (which is treated as he is Self Employed/a Sole Proprietorship) could be a better fit.
You may want to ask the tax professional the amount of savings will be as a S-corporation (saves Social Security and Medicare on Medical Premiums and Distributions, which should be pretty low) versus the extra time/work/cost of filing quarterly payroll forms, filing and paying Federal Unemployment (usually $420, unless State Unemployment is also paid), any extra State requirements, and the separate corporate tax return. Unfortunately, some unscrupulous tax professionals just automatically recommend a corporation without analyzing your specific circumstances. They do that because they will get paid more to do the separate corporate return, and all of the payroll forms.
I suspect that the corporation and its required payroll and paperwork is going to cost you more time and money than it saves. Without knowing your entire situation, my first thought is that a Single Member LLC (which is treated as he is Self Employed/a Sole Proprietorship) could be a better fit.
You may want to ask the tax professional the amount of savings will be as a S-corporation (saves Social Security and Medicare on Medical Premiums and Distributions, which should be pretty low) versus the extra time/work/cost of filing quarterly payroll forms, filing and paying Federal Unemployment (usually $420, unless State Unemployment is also paid), any extra State requirements, and the separate corporate tax return. Unfortunately, some unscrupulous tax professionals just automatically recommend a corporation without analyzing your specific circumstances. They do that because they will get paid more to do the separate corporate return, and all of the payroll forms.
‎June 3, 2019
4:45 PM