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Discuss what's fucking going on, and which programs are best and worst. One-time "program" announcements from "established" webmasters are allowed. |
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#1 |
Confirmed User
Industry Role:
Join Date: Nov 2003
Location: Olongapo City, Philippines
Posts: 4,618
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US Webmasters: What is your financial structure - LLC, Corp, Sole Proprietor?
How do you handle your taxes?
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#2 |
Too lazy to set a custom title
Industry Role:
Join Date: Sep 2003
Posts: 22,651
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what are these "taxes" you speak of?
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#3 |
Confirmed User
Join Date: Oct 2006
Location: FLA
Posts: 2,538
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s corp.. puts me in a better tax bracket
i 1099 my help making them sub contractors and i write off everything and anything possible
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GooSearch Real Text Ads Without The Drama Coming Back Bigger and Better Then Ever |
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#4 |
Confirmed User
Join Date: Feb 2007
Location: The Republic of Barebackistan
Posts: 1,914
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S Corp.
It's far superior to being self-employed because of social security taxes, which are 15.65%. If employed, employee and employer each pay half--but self employed obviously has to pay ALL. Let's say you make $100k. As a self-employed person, you pay $15.65k on soc sec taxes. S Corp is better because you can make yourself an employee and the S Corp can pay you a salary of, say, $30k. Your company and you pay the 15.65% soc sec taxes on that $30k, which is only $4695, vs. $15.65k as self employed. You can't avoid income taxes to the S Corp on the other $70k, but you can avoid soc sec taxes cause it's not salaried back to you. You can just withdraw money from the company as needed. This is all legal. But don't take my advice--check with your CPA and/or lawyer. |
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#5 |
Meow Media Inc.
Industry Role:
Join Date: Jul 2001
Location: In the valley of the sun, cactus, tacos, tequila, and nod
Posts: 7,785
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S Corp since 1996.. and still the way to go
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#6 |
In Tushy Land
Join Date: Oct 2002
Location: Nebraska
Posts: 40,149
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Got myself a S-corp as well. Maybe myself a small but decent salary each month and claim that income of course. Talk with a good lawyer and accoutant to help you out. Luckily for me, my wife works at the lawyers office and they do alot of work with my accountant so it all goes together great!
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#7 |
Outside looking in.
Industry Role:
Join Date: Feb 2005
Location: To Hell You Ride
Posts: 14,243
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LLC here - makes it easier to do taxes as I can report the LLC's income on my 1040.
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#8 | |
The Demon & 12clicks
Industry Role:
Join Date: Oct 2001
Location: SallyRand is a FAGGOT
Posts: 18,208
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Quote:
First of all only the first $94,200 is subject to BOTH the S.S. part( 12.4%) and the medicare part( 2.9%) of SE taxes. Above that you only pay on the medicare part. So if you made say $194,200 the $100K over you only pay $2900. So on $100K income first think you do is multiply $100K by 92.35%. That comes to $92,350. Mulitply that by 15.3% which is $14,130. Now 50% of that( $7065 ) is deductable off your taxable income. So if you are in the 28% tax bracket that's shaves $1978 off your taxes. Don't believe me? http://www.irs.gov/pub/irs-pdf/f1040sse.pdf |
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#9 |
Confirmed User
Industry Role:
Join Date: Nov 2003
Location: Olongapo City, Philippines
Posts: 4,618
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great stuff peeps - thanks for the info. I do know that self employment taxes are killing me, so I know I need to make some changes.
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#10 |
Meow Media Inc.
Industry Role:
Join Date: Jul 2001
Location: In the valley of the sun, cactus, tacos, tequila, and nod
Posts: 7,785
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Gator.. true and not true.
It depends on how you work it. My S-corp is set up so that on paper I receive an annual salary of $200K (amount suggested by my CPA firm to maximize my SS and Fed Withholding deductions along with allowing me to take the maximum contribution to a retirement plan as a business expense). That money is subject to all the normal payroll taxes both employer and employee. The rest of the net income that comes through in a form K-1 is not subject to any self-employment tax. The $200K annual salary comes through on a W-2. PK
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#11 |
The Demon & 12clicks
Industry Role:
Join Date: Oct 2001
Location: SallyRand is a FAGGOT
Posts: 18,208
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What's not true? Everything I posted was true. His numbers were wrong. First of all the SE tax rate is 15.3% not 15.65%. Secondly. Only income $94,200 and under is subject to that 15.3% above that is subject to 2.9% rate.
I'm not commenting which is better or worse. I'm correcting math errors. If that poster is going to make a case about one being better than the other then that poster needs to at least have his facts straight. Really it depends on the individual situation. If someone is new to this or only does it for part-time money and only makes $10K a year, it's a bit silly to form a S-corp. What's his salary going to be, the entire $10k? You say you pay yourself $200K. Well that's great. Do you know how many people here don't even gross that? Fact is if one forms a S-corp and one pays oneself close to minimum wage you can bet the IRS is going to look at that. |
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#12 |
Confirmed User
Join Date: Feb 2003
Location: DeltaHell
Posts: 3,216
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S Corp because you also have the option of just taking a management fee which can then be rolled over to your personal side if need be without the SS and Medicare - as long as you dont do it a lot
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#13 | |
Meow Media Inc.
Industry Role:
Join Date: Jul 2001
Location: In the valley of the sun, cactus, tacos, tequila, and nod
Posts: 7,785
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Quote:
In the case of someone with net income near or lower than the social security tax income threshold ($97,500 for 2007), an S-Corp doesn't neccessarily provide a benefit in regards to the medicare portion of the SE tax. For S Corps with income over that limit it certainly can be a benefit. Such a benefit that the laws are being reviewed and may be changed in the case of SCorps with one owner or with an owner that owns a 50% or larger share. The subject comes up here several times a year and almost always around tax time. Ultimately (and as you said), the decision is based on individual circumstances and it helps to consult an attorney familiar with incorporating and a CPA. PK
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#14 | |
Confirmed User
Join Date: May 2005
Posts: 742
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Quote:
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#15 | |
Confirmed User
Join Date: Mar 2004
Posts: 147
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Quote:
The amount you put into SS is obviously not what you're going to be getting back. You're much better keeping that money and investing it yourself. Put in the bare minimum to SS humanly possible and pray there actually is a SS system when it's time to retire. |
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#16 |
Confirmed User
Join Date: Jan 2006
Location: San Diego
Posts: 802
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S Corp is the way to go. If you have an Amex go to www.bizfilings.com and register it there, way cheaper than using an attorney.
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Busty Amateurs - the original girls and and tons more busty amateurs. |
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#17 |
Old broad
Join Date: Oct 2002
Location: Away
Posts: 13,933
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S Corp. My CPA went through everything with me and decided $$$ wise for me, it's the best arrangement. I pay myself a relatively small salary which I pay SS and Medicare taxes on. All income I have to pay state and federal income tax on (unearned income) but this gives me some leeway on what I'm putting into SS and what I'm using to invest on my own. I think right now my SS statement shows me getting something pathetic like $500 a month when I retire - I'm better at investing my $$$ than the government is ;)
BTW, a tax attorney friend of mine also OK'd this so don't tell me I need a new accountant ![]() |
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