Worried

Just give me a ballpark figure. Thanks.

BOSS1

two billion

ztik

when you made enough to pay taxes

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DateDoc

I'd agree with that.

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Lycanthrope

When one has personal assets he wants to protect

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Worried

I've been making enough to pay takes for over 5 years already and never got incorporated or anything. I kept putting it up and keep on having to pay out of the ass for self-employment taxes.

Last year I made low six-figures but as a self employed person, not LLC or S-Corp or anything. I always went to H&R Block and I guess they just do basic taxes, they told me they didn't know anything about LLC or S-Corp and could not advise me in that regard.

That's why I have to start for 2007.

ztik

If you are making 6 figures you should have done it long ago. You are throwing away ALOT of money. Just look for a CPA in the phone book.

Setting up an S-corp is really easy, just a few forms to fill out. Alot of times the CPA can help you. Lawyers are not needed and tax you up the ass.

Either that or just find a place to do it online for cheap.

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djscrib

Actually I think the correct answer is one of the following:

A) When it's worth the filing/accountant fees to get the legal shield an S-corp/LLC provide

B) When the amount you save by using a Corp/LLC exceed what you pay in filing fees.

C) Some sliding scale from above.


First of all, in reality the tax deductions you can take as an S-Corp or LLC are really the same as what you can take as a Sole Proprietership. For the most part, an LLC is no better than an S-corp unless you're going to have a ton of shareholders, so I'd just go with an S-Corp.

Some things you can do with an S-Corp.

If you make $90k income with a sole proprietership, you're paying 15.3% Self-Employment tax on the whole amount.

As an S-Corp, you can take 45k as a wage (which gets taxed 15.3%) and 45k as a Dividend which doesn't get taxed on that. You have to pay State/Fed taxes on both, and you get a bit of your Self-Employment tax back as a deduction, but It's still a fair chunk of money you can save.

You must take a reasonable wage though, you can't take a $1 wage, and $89k dividend (i know that's what you were thinking).

Lastly, Get yourself a real fucking accountant and an aggressive one. If you're making 6 figures why the hell are you going to H&R block? Get reccomendations from friends on accountants. Some will do the bare minimum and only what you tell them to do. Others will probe with "leading" questions to help you maximize your deductions. E.G. "You've had people over for dinner, you've talked business with them right? Well let's deduct 1k for home entertainment of customers"

Lastly, setting up an S-corp is very easy to do yourself and can be done completely online. If you're really lazy, use legalzoom.com for a few hundred bucks. NEVER use a lawyer unless you're just itching for an ass raping.

PS. Spend $100 on some small business tax deduction books and actually read them. then deduct the $100.

djscrib

[QUOTE=Worried;12226828]Last year I made low six-figures but as a self employed person, not LLC or S-Corp or anything. QUOTE]


FYI the first time I got a "REAL" accountant, it resulted in in-pocket savings of about 6k over what I would've gotten otherwise. Also, you can re-file amended returns from the previous 3 (maybe 5) years. I also did this and after filing fees netted 3-4k for at least 2 of the years.

Sosa

making six figs and paying self employement tax? wow you should have set it up a long time ago.