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Posted by petethethor on January 27, 2008, 5:17 pm
Please log in for more thread options > On Jan 26, 9:59 pm, petethet...@gmail.com wrote:
>
>
>
> > Hi,
>
> > I am a sole owner/shareholder of an S-corporation incorporated in
> > Washington State. I am thinking about taking a contract job in NYC and
> > would temporarily move there.
>
> > Let's assume that corporation income from NYC work is $200k/year. I
> > would like my corporation to rent me an apartment in NYC for this
> > temporary assignment and I can get reimbursed for its cost. If the
> > apartment is $40k/year that leaves net income of $160k which I can
> > issue myself as salary. I would have to pay FICA, FUTA, NYC state and
> > city, as well as federal income tax.
>
> > Since FICA stops at ~$90k I would think this would be a better way to
> > go. Since net income for corporation after expenses (apartment) and my
> > salary would be 0, I would think there would be no tax to pay on
> > corporate level. I do not think NYC could double tax me, or they could
> > but tax basis would be 0, correct?
>
> > Please let me know if I am close or completely off in my calculations/
> > assumptions. Thanks
>
> > --
> > << ------------------------------------------------------- >>
> > << The foregoing was not intended or written to be used, >>
> > << nor can it used, for the purpose of avoiding penalties >>
> > << that may be imposed upon the taxpayer. >>
> > << >>
> > << The Charter and the Guidelines for submitting posts >>
> > << to this newsgroup as well as our anti-spamming policy >>
> > << are atwww.asktax.org. >>
> > << Copyright (2007) - All rights reserved. >>
> > << ------------------------------------------------------- >>
>
> S corps do not pay income tax. It's all tax directly to you. The
> travel (and living) expenses are virtually all deductible as long as
> you have retained your WA home (ujnless your "employer" reimburses you
> for them).. "temporary" must be expected to be less than 1 year.
>
> ed
>
> --
> << ------------------------------------------------------- >>
> << The foregoing was not intended or written to be used, >>
> << nor can it used, for the purpose of avoiding penalties >>
> << that may be imposed upon the taxpayer. >>
> << >>
> << The Charter and the Guidelines for submitting posts >>
> << to this newsgroup as well as our anti-spamming policy >>
> << are atwww.asktax.org. >>
> << Copyright (2007) - All rights reserved. >>
> << ------------------------------------------------------- >>
I agree with federal income tax flowing through to the shareholders.
And in a case of NY state the same is true. However, I think that NY
City does not recognize S Corporation status and corporations have to
pay city tax of 8.85% on net income. I am just wandering what is net
income defined as and if my salary would be excluded from it. I know I
would have to pay ~3.5% NYC income tax on my salary but that sure
beats 8.85%. Thanks
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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