Question about s-corp

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  • bausch
    Confirmed User
    • Jul 2006
    • 3017
    #1

    Question about s-corp

    I am aware that you get some tax advantages this way and that you are able to pay yourself a salary etc but won't it be a disadvantage if you pay yourself out a lower salary in case you want to apply for a high credit line etc?

    Supposedly it's better to pay yourself out a lower salary so you save more on taxes but what if you want to make a major purchase/ get a high credit line?
    Tags: None
    • tony299
      lurker
      • Aug 2002
      • 57021
      #2
      have you spoke to a cpa?

        Comment

        • After Shock Media
          It's coming look busy
          • Mar 2001
          • 35299
          #3
          Every corp type has a best fit for each person and situation. You really need proper advice from an accountant who knows your personal numbers and what is best for you.

          [email protected] ICQ:135982156 AIM: Aftershockmed1a MSN: [email protected]

            Comment

            • BV
              wtf
              • Sep 2001
              • 10914
              #4
              Your portion of the profit (or loss) the scorp makes will also show as your income. (in addition to your salary)

                Comment

                • baddog
                  So Fucking Banned
                  • Apr 2001
                  • 107089
                  #5
                  The corp can always make the purchase or you can take a shareholder distribution for what you need.

                    Comment

                    • qxm
                      Confirmed User
                      • Jul 2006
                      • 5970
                      #6
                      Originally posted by baddog
                      The corp can always make the purchase or you can take a shareholder distribution for what you need.
                      dam.....I'll need u to refer me to your accountant, I'll be doing lots of changes (accounting-wise) in the next 3 months or so cause this year I was tax-raped. Do you use an accountant in Hollywood or surrounding areas?

                      ICQ: 266990876

                        Comment

                        • MikeSmoke
                          Confirmed User
                          • Nov 2002
                          • 3241
                          #7
                          Originally posted by qxm
                          I'll be doing lots of changes (accounting-wise) in the next 3 months or so cause this year I was tax-raped.
                          Consider it an expensive wake-up call - the year I had to pay more than 80K to the feds (my first real year in the biz) was the year I found a lawyer and an accountant who could set up a corporate structure that would not only minimize taxes, but set up the right kind of retirement and investment vehicles that will hopefully keep me from having to wear a baseball cap and bag groceries when I retire

                          icq: 541-739-92

                            Comment

                            • Mistah Charlie
                              Confirmed User
                              • Nov 2007
                              • 478
                              #8
                              I agree you need to consult and attorney. Ask about forming an LLC. This will probably do what you need at a far lower cost.
                              "Gonna scare you up and shoot you
                              Cause Mister Charlie told me so"

                                Comment

                                • JA$ON
                                  Confirmed User
                                  • Aug 2007
                                  • 1329
                                  #9
                                  100% of the s-corps profits or losses get passed through to the owners of the s-corps stock. While still "income", you'll save the Social security, medicare etc on the portion that you take as a distribution.

                                  Call a cpa. While there are benifits to an S-corp vs an LLC, an s-corp requires far more paperwork (keeping of minutes, the taxes need to be paid on the salry you takes etc)

                                    Comment

                                    • V_RocKs
                                      Damn Right I Kiss Ass!
                                      • Nov 2003
                                      • 32448
                                      #10
                                      I need a drink.

                                        Comment

                                        • Sosa
                                          In Tushy Land
                                          • Oct 2002
                                          • 40149
                                          #11
                                          Originally posted by JA$ON
                                          100% of the s-corps profits or losses get passed through to the owners of the s-corps stock. While still "income", you'll save the Social security, medicare etc on the portion that you take as a distribution.

                                          Call a cpa. While there are benifits to an S-corp vs an LLC, an s-corp requires far more paperwork (keeping of minutes, the taxes need to be paid on the salry you takes etc)

                                          paperwork for your lawyer or accountant sure. I get charged just the same if it were a s-corp or llc. My meeting is telling my lawyer that nothing has chanced and off my paperwork goes to the state etc.

                                            Comment

                                            • JP-pornshooter
                                              Confirmed User
                                              • Sep 2006
                                              • 4007
                                              #12
                                              Originally posted by JA$ON
                                              100% of the s-corps profits or losses get passed through to the owners of the s-corps stock. While still "income", you'll save the Social security, medicare etc on the portion that you take as a distribution.

                                              Call a cpa. While there are benifits to an S-corp vs an LLC, an s-corp requires far more paperwork (keeping of minutes, the taxes need to be paid on the salry you takes etc)

                                              what he said...
                                              the reason S-corp owners pay themselves a salary is because so many real estate agents for years did not (and didnt pay social security taxes), the IRS got on their case and now is better to pay yourself a small salary and pay employer ss taxes on that income and not on the entire s corp income.
                                              in a c corp you can leave the money in the corp and only take out what you want, but you would pay tax twice, first the c corp would pay tax on its profit, then whatever dividend you give yourself, you'd be paying income tax.. good for uncle sam !
                                              as i understand LLC are better for "investment partnerships" or shorter termed ventures..
                                              dont go cheap, get real advise from a CPA.
                                              "Obscenity is whatever gives the Judge an erection." -- Author Unknown

                                                Comment

                                                • Sly
                                                  Let's do some business!
                                                  • Sep 2004
                                                  • 31378
                                                  #13
                                                  Originally posted by JA$ON
                                                  100% of the s-corps profits or losses get passed through to the owners of the s-corps stock. While still "income", you'll save the Social security, medicare etc on the portion that you take as a distribution.

                                                  Call a cpa. While there are benifits to an S-corp vs an LLC, an s-corp requires far more paperwork (keeping of minutes, the taxes need to be paid on the salry you takes etc)

                                                  More paperwork? That's what the lawyer and accountant are for.

                                                  As already mentioned, everybody's personal situation is different so it would be best to speak with somebody well versed in these types of things. A good accountant is worth every penny.
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