thanks PK... yeah, you seem a little wired.... hehehe.... :winkwink:

it's been a few years, but I found a site that broke it all down for me very nicely... I think if I make this move again, it'll be to an LLC... looks much more promising (and gives me far greater peace of mind than what I've been getting from this board on the subject) after doing some reading here: http://www.legalzoom.com/law_library...roduction.html

check it out if you (or any of you reading this) got a few minutes and if you see something that doesn't look right, I'd be interested in hearing your thoughts on what they have written there on it.....

(I won't do a general or an S corp again though.... not an option I'm willing to consider again.)

From the url you cited..
"However, member-employees of an LLC are required to pay social security and medicare taxes on the profits of an LLC over and above the member's salary. Stockholder-employees are not required to pay these taxes on profits over and above the stockholder's salary."

That sounds like to me that LLCs member employees still get the same medicare tax hit as a sole proprietorship versus the break given S-Corp or General Corp stockholder employees.

true.... definately a downside. Nothing is perfect. :winkwink:

definately something to discuss with the tax man next season....

Just a side note about this one... Be very careful with this. If the IRS decides to audit, and they examine your home office, if there is anything in there that is not business related, they can deny your claim, and charge you a penalty. It doesn't happen often, but, it is a possibility.

:2 cents:

claiming a percentage of your residence as a home office is only suggestable if you A) Rent or B) have no plans to sell your home ...

If you claim a home office, when you go to sell your home, you are responsible to repay the amount you wrote off each year ...

more of a nuisance than anything .... :(

renters are the only exemptees to this

PK, will you be my tax advisor ? purty please :)

haha.. I spent the first 20 years or so of my working life (even before I was out of high school) as a bookkeeper, accounting clerk, accounting manager, and so forth. I don't even do my own taxes anymore just so there's that buffer between myself and the IRS, but I try to keep informed of what's going one and not that much has changed since 1995 when I stopped doing accounting in the private sector. The college degree (Bachelor of Accounting) is good for something.

What tax software do you recommend? I'm like you, I don't pay it quarterly either. I just paid the penalty. But, I am thinking of changing it this go around. Figured there was some tax program that could help me do it and keep track of everything for the quarter.

Exactly!! This topic always gets me irritated, because of all of the misinformation. As an LLC and SP you can claim the exact same things for deductions.. not much is different, except you are more portected from lawsuits..kinda. For tax reasons, there is no purpose to an LLC. We paid the same taxes with our LLC as we did before we had the LLC. With our S Corp, much better. Yes, an S Corp takes more to get set up, but basically, when we formed our LLC, we just wasted $1100, because it's getting disolved at the end of this year.

Talk to a corporate accountant before doing anything... get the full story and ask questions!

from every tax accountant I've ever spoken with, you cannot write off jack in terms of square footage or electric if you are a renter. You must own the home. So, I'm not sure where you're getting this from.... unless it's different in Canadia.

And why would you have to pay back your deduction if you sell your home and move? That's the most ridiculous thing I've ever heard. That's like writing off computer equipment, and then having to repay the deduction if you sell it next year.....

My mother has been writing off half her house every year for decades..... so by your statement, should she decide to sell and move next summer, she'll have to pay back 30 years of tax deduction?

I don't think so.