@gousecris wrote:
Hi Alicia,
Thanks for the info. So whatever my S-corp withholds, I will not get refunded and it is gone(loss for me). And In case of 1099 with two jobs for two employers will be refunded to the independent contractor right. Why the same law not applied here. Since I am the owner as well as employee and Social Security is based on the SSN. And I did not with hold the FICA taxes as I already know I maxed out. Do I get any letter? How Can I avoid double payment of Social Security on Employer portion?
You don't avoid the double payment, because you made yourself an S-corp.
If you were a sole proprietor with 2 different jobs and 2 schedule Cs for two different types of business activities, those business are treated as disregarded entities. You and the businesses are legally the same thing. If each business has a net profit of $100,000 and your total net profit is $200,000, you only pay SE tax on the first $147K because you and the businesses are legally the same.
That changes completely if your business is an S-corp. An S-corp is a separately and distinct legal entity from the owners, even if there is only one own. The S-corp follows all the tax laws for corporations, not individuals. Under the tax law, if you work for corporation A and receive $100,000 of wages and $100,000 of wages from corporation B, both corporations are required to withhold the full employee share of social security and both corporations are required to pay the full matching share of social security. Then when you file your tax return, you can claim a refund of the excess social security that represents your share, but the employer share from company A and B goes into the government coffers and neither A nor B is entitled to a partial refund. This is true even if you are the owner of corporation B.
You would avoid this if your self-employment business was a disregarded entity under schedule C. You decided to make it an S-corp, this is one of the disadvantages of doing that.
