Self employment scorp taxes

Forum|Forum|2 years ago
August 30, 2023
1 reply
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Good afternoon-

I am not sure if this is the live forum however I have questions on how to transition to an SCORP style taxing so that my husband and I may “pay ourselves”. I’m not sure what quarterly or monthly obligations that comes with and/or to make the switch. Can someone point me in the right direction?

Mo G [phone number removed]

Ask the Experts - Self-Employed - Aug 2023

sccas

Employee Tax Expert

Great question. In scorps you simply take a share of company profit as your payment. and can pay yourself this way. I recommend use a payroll company. Quickbooks is of course my favorite

Salary, your wages or reasonable compensation. This is considered taxable income to the payee by the IRS.
Distributions, the earnings that are paid as distributions to you as the owner. These are not employee wages and are not taxed as self-employment income in an S-corporation.

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Momoore93Author

Level 2

Thank you so much for responding!!!!!!

As we speak I’m looking into form 2553 and recognize I will need a late filing. If my reasoning was because I simply did not know I needed to set my LLC up such way, what is my “legal verbage”?

sccas

Employee Tax Expert

Of course this is not legal advice, but how about , " Form was not filed since taxpayer was unaware of potential tax implications before making a final decision on Form 2553 obligation"

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