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Started By
Message
1
Posted on 4/16/12 at 7:33 pm to Ortho Reb
Yep, I figured. CPA did the numbers and still has it around 10k per quarter.
So if I do a sep or simple, can I choose not to do any matching?
So if I do a sep or simple, can I choose not to do any matching?
Posted on 4/16/12 at 8:02 pm to ColdDuck
quote:
So if I do a sep or simple, can I choose not to do any matching?
You own the company. It's your decision. I choose not to match 401k money currently. My company is doing well but I don't want to put the extra stress on myself just yet.
Plus, I'm already contributing the maximum allowable for my wife and me at this time.
Posted on 4/16/12 at 8:37 pm to krehn11
quote:
What?
Am I wrong?
Posted on 4/16/12 at 10:54 pm to krehn11
It's a pretty large building and it's brand spanking new. Just built in the last 2 years or so with lots of bells and whistles. I could see how he could justify his rent- I don't think he's bending the rules.
Posted on 4/16/12 at 11:08 pm to ColdDuck
quote:
So if I do a sep or simple, can I choose not to do any matching?
I would advise seeking legitimate counsel on this. You can contribute up to $50k based upon earnings and guidelines, etc, but I do not believe you can exclude those employees that have been working 3 or more years.
From the horse's mouth:
IRS SEP FAQs
Posted on 4/17/12 at 3:13 pm to tirebiter
That is what i thought. SEP you have to match your employees the same % you match for yourself. Simple, you have to match up to 3% for employees or 2% flat. You can't pick and choose.
Posted on 4/18/12 at 10:17 am to I Love Bama
quote:
Am I wrong?
Gifting to your kids would not reduce your taxable income. Your kids would never be taxed on those gifts.
Posted on 4/18/12 at 11:13 am to ColdDuck
quote:
I have not looked into a SEP yet,
you need to ASAP. Depending what you make you can put somewhere up to 49k a year in one or 25% of your income whichever is the lesser I believe.
Posted on 4/18/12 at 10:37 pm to ColdDuck
Go the simple Ira route, is matching 2-3% of your one employees salary that big of a deal? Hire your wife, she starts to gain SS credits for retirement or disability as well as she gets a whole allotment for her own Ira fund. Also look at setting up an LLC to buy a building and then rent to your business if nothing else in 15 years you will have a building instead of a stack of rent recipts
Posted on 4/18/12 at 10:41 pm to Tigerpaw123
So if I hire my wife, say for 10k, then she can contribute the whole amount? I assume I would have to put her on full payroll and pay social security and payroll taxes? Or can I just give her a DRAW like I give myself?
She is a part time sub right now.
She is a part time sub right now.
Posted on 4/18/12 at 10:47 pm to ColdDuck
Why are you paying yourself a draw without taxes taken out?
Get on payroll, take taxes out appropriately and you won't have to pay the stupid estimated tax payments.
Better yet. Speak with an accountant and set things up properly.
Get on payroll, take taxes out appropriately and you won't have to pay the stupid estimated tax payments.
Better yet. Speak with an accountant and set things up properly.
This post was edited on 4/18/12 at 10:48 pm
Posted on 4/18/12 at 11:03 pm to VABuckeye
I have an accountant but never inquired about my wife. My business is an LLC and income is on my personal return with pass through taxation. So I just have to pay the quarterly estimated taxes. No big deal.
She does help me out with the business and I like the idea of her payment basically going into a simple Ira plus 3% match. I could pay her 15k, she can defer 11500 and I can match 3%. That would be a good chunk that would be a business expense and less on my taxable income. Of source I would have to pay ss and FICA.
She does help me out with the business and I like the idea of her payment basically going into a simple Ira plus 3% match. I could pay her 15k, she can defer 11500 and I can match 3%. That would be a good chunk that would be a business expense and less on my taxable income. Of source I would have to pay ss and FICA.
This post was edited on 4/18/12 at 11:04 pm
Posted on 4/18/12 at 11:12 pm to VABuckeye
quote:
Get on payroll, take taxes out appropriately and you won't have to pay the stupid estimated tax payments.
I think you cant do this anyway. single member LLCs can not have the owner on payroll according to a bunch of Google searches?
Posted on 4/19/12 at 7:32 am to ColdDuck
I own an LLC. For tax purposes I am treated like an S Corp by the IRS.
LLCs treated as S corporations:
Question. If you can't be on a payroll as a SMLLC why not add your wife to the LLC as she is active in the business?
You can elect to be treated as an S Corp but you have to make the election during a certain time window. I believe that window is presently open.
LLCs treated as S corporations:
quote:
If an llc makes an election to be treated as an S corporation, the LLC's profits are subject neither to self-employment taxes nor to corporate income tax. The S corporation does need to file an 1120S tax return, however, and through this tax return the LLC's owners get taxed on their respective shares of the corporation's profit.
Note that if an llc owner works in the business, the LLC-treated-as-an-S corporation must pay a reasonable wage to the llc owner. The LLC absolutely does owe payroll taxes on these wages.
Question. If you can't be on a payroll as a SMLLC why not add your wife to the LLC as she is active in the business?
You can elect to be treated as an S Corp but you have to make the election during a certain time window. I believe that window is presently open.
This post was edited on 4/19/12 at 7:46 am
Posted on 4/19/12 at 2:03 pm to VABuckeye
If he is the member of a SMLLC and working for the company, then he needs to pay a reasonable wage to himself and pay all taxes on that amount, ie SSI/Medicare, state and federal, etc. Excess income of the LLC, ie profit, can be distributed outside of those requirements although he would still owe Fed and state income taxes on it via his personal return. I am not getting involved in the rest of this.
Posted on 4/19/12 at 3:09 pm to tirebiter
I am good with all of the owner tax issues. The original topic was how to reduce taxable income and the idea of employing my wife was discussed. I was trying to figure out if I am going to lose out if I have to pay extra FICA and other BS for payroll on her wages. I want to stick all her wages In the company simple IRA plus 3% match.
Posted on 4/19/12 at 3:53 pm to ColdDuck
If you pay her taxes must be paid on the wages. No getting around that one.
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