|
Posted by Phil Marti on June 1, 2008, 5:27 pm
Please log in for more thread options
> My reason for asking is that if the second company is your own S Corp
> from which you draw a W2 salary, then you could end up paying more
> social security tax.
>
> By contrast, if your company was a sole proprietorship, then all your
> earnings would be on Schedule C.
<snip>
> So what's the solution to avoid paying too much social security tax?
Scrap the S-Corp and operate as a proprietorship or LLC.
--
Phil Marti
Clarksburg, MD
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
|
|
Posted by removeps-groups@yahoo.com on June 2, 2008, 12:07 pm
Please log in for more thread options
> Scrap the S-Corp and operate as a proprietorship or LLC.
Is is possible for the corporation to be taxed as a sole
proprietorship? This gives you the liability protections of a
corporation, but the tax benefits of a sole proprietorship (including
not paying too much social security tax, and also 0.9235% of income is
subject to SE tax as opposed to 100%). If you previously elected S
corp status, how do you elect sole proprietorship status?
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
|
|
Posted by Bill Brown on June 2, 2008, 12:43 pm
Please log in for more thread options On Jun 2, 12:07 pm, "removeps-gro...@yahoo.com" <removeps-
gro...@yahoo.com> wrote:
>
> > Scrap the S-Corp and operate as a proprietorship or LLC.
>
> Is is possible for the corporation to be taxed as a sole
> proprietorship? This gives you the liability protections of a
> corporation, but the tax benefits of a sole proprietorship (including
> not paying too much social security tax, and also 0.9235% of income is
> subject to SE tax as opposed to 100%). If you previously elected S
> corp status, how do you elect sole proprietorship status?
You liquidate the corporation which is at least one taxable event,
perhaps more.
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
|
|
Posted by Stuart Bronstein on June 2, 2008, 6:24 pm
Please log in for more thread options >
>> Scrap the S-Corp and operate as a proprietorship or LLC.
To avoid excess self-employement/social security tax? You can do that
with an S-corp, too, and pay less tax than a proprietorship.
> Is is possible for the corporation to be taxed as a sole
> proprietorship?
If it's an S-corporation, pretty much but not exactly. If it's an LLC,
the answer is yes, you can chose to be taxed as a proprietorship, C-
corporation or S-corporation.
Stu
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
|
|
Posted by Katie on June 9, 2008, 5:08 pm
Please log in for more thread options >
> >> Scrap the S-Corp and operate as a proprietorship or LLC.
>
> To avoid excess self-employement/social security tax? You can do that
> with an S-corp, too, and pay less tax than a proprietorship.
>
> > Is is possible for the corporation to be taxed as a sole
> > proprietorship?
>
> If it's an S-corporation, pretty much but not exactly. If it's an LLC,
> the answer is yes, you can chose to be taxed as a proprietorship, C-
> corporation or S-corporation.
>
> Stu
However, if you have an LLC that has elected to be taxed as a
corporation and made an S election, in order to go back to sole
proprietor (disregarded entity) you must liquidate the corporation and
distribute its assets -- a taxable event. See Reg. Sec. 301.7701-3(g)
(1)(iii).
If the S corporation holds any appreciated assets (including
inventory), gain will be recognized as if the corporation had sold
those assets at FMV, and that gain will flow through to the
stockholder.
Katie in San Diego
--
<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>
|
| Similar Threads | Posted | | Working in a foreign country, paying into social security. | August 29, 2008, 3:29 pm |
| Avoid paying corporation and INCOME tax | May 28, 2008, 11:37 pm |
| Social Security Tax | March 21, 2008, 4:25 pm |
| Paying Penalty for Excess Roth IRA Contribution | April 12, 2006, 11:09 pm |
| Social Security sign up or not | November 10, 2006, 2:22 am |
| Social security and self employment | February 20, 2007, 6:57 pm |
| Social security taxes | October 26, 2007, 11:52 pm |
| Re: Social security taxes | October 30, 2007, 11:47 pm |
| can I pay social security tax voluntarily? | November 9, 2007, 6:55 am |
| Is Social Security factored in? | March 15, 2008, 2:45 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap