Hi,
Great questions!
Making your business a S-Corp will NOT keep your taxes separate. A S-Corp files their own tax return, but does not pay taxes. The S-Corp profit/loss "passes through" to the shareholder, you, to report on your individual income tax return.
You will not want to pay yourself. You pay tax on the business profit, and take out money as distributions. You do not report the distributions on your individual income tax return, as you have already paid tax on the business profit.
An S-Corp is not taxed at a higher rate, as a S-Corp does not pay tax. The profit passes through to the individual to pay tax on their individual income tax return, at the individual tax rate.
I hope this information is helpful!
Connie
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