- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Business structure: LLC or S-corp?
Posted on 7/18/14 at 10:09 pm
Posted on 7/18/14 at 10:09 pm
Started a home health subcontracting company back in January. I work on contract and have two assistants who work under me under contract as well, and we subcontract for two large home health providing agencies in the area. It's become pretty profitable quickly, and is netting about 1500-1900$ a week based on my actual visits and what I keep after I pay the assistants for their visits. There is virtually no overhead to speak of, but I can get some nice tax write offs for depreciating a vehicle or mileage and a few other things.
In addition, I also work as a W2 full time salaried employee in a private practice with a decent amount of schedule flexibility to make my business run on the side. We are not direct competitors as my business is home care and my employer's business is an outpatient setting, and they sometimes complement each other well and lead to more business for both.
My question is this: how should I file taxes this year? My company is currently an LLC and everyone is paid at a contract rate per visit by my assistants and myself, but I'm not sure LLC is the best structure. For the past few months I get the deposits my company gets paid directly deposited into my business checking, send 2 checks to my assistants, then transfer the remaining balance into my personal savings account as payment to myself for the visits I make and what I make off the assistants. Should I 1099 myself at the end of the year?
In addition, I also work as a W2 full time salaried employee in a private practice with a decent amount of schedule flexibility to make my business run on the side. We are not direct competitors as my business is home care and my employer's business is an outpatient setting, and they sometimes complement each other well and lead to more business for both.
My question is this: how should I file taxes this year? My company is currently an LLC and everyone is paid at a contract rate per visit by my assistants and myself, but I'm not sure LLC is the best structure. For the past few months I get the deposits my company gets paid directly deposited into my business checking, send 2 checks to my assistants, then transfer the remaining balance into my personal savings account as payment to myself for the visits I make and what I make off the assistants. Should I 1099 myself at the end of the year?
5
Posted on 7/19/14 at 2:31 am to Saint5446
I will not pretend to know what is best for you, but I have been recently looking into filing as an S-Corp. I currently have an LLC and have been told I can file as an S-Corp. The main reason for that is the SE Tax. As an S-Corp you can pay yourself a "reasonable salary" and just pay the SE Tax on that portion. The rest you take as dividends.
Again, not a tax adviser or really sure if this is even what I will do, but I'm just starting to look into it.
Again, not a tax adviser or really sure if this is even what I will do, but I'm just starting to look into it.
Posted on 7/19/14 at 7:44 am to Saint5446
quote:
Should I 1099 myself at the end of the year?
Well if you don't, it would be tax evasion. Basically, you K1 yourself for the money you take. If the business is steady and you know how much to expect, you switch to an S corp and pay yourself a W2 salary and you pay yourself a dividend at the end of the year.
If I am right, you can't switch the company to an S corp till next year. the deadline has passed for this year already.
But you do know you can have an S corp LLC, right? I'm not sure if you are asking if you should change to be incorporate instead of an LLC. But, to my knowledge, you can just change from a C corp LLC (which I presume you are now0 to an S corp LLC.
Posted on 7/19/14 at 9:28 am to Saint5446
quote:Not required. Your LLC is a disregarded entity for tax purposes. You will report the revenue and expenses from the business on Sch. C. You will be taxed on whatever the net income reported on Sch. C is, and not on the cash transferred from the business to your personal savings. As far as the IRS is concerned, there is no difference between your business checking account and your personal savings account. You can spend the money in either as you desire.
Should I 1099 myself at the end of the year?
Your LLC should receive 1099-Misc from your customers who pay you over $600 during the year. And the total amount of revenue you report on Sch. C should be greater than, or equal to, the amounts reported to your business on the 1099-Misc.
Posted on 7/19/14 at 9:35 am to Saint5446
Are you the sole owner?
If you combine your w2 wages with your earnings from the outside company do they exceed 117k?
If you combine your w2 wages with your earnings from the outside company do they exceed 117k?
Posted on 7/19/14 at 9:44 am to Saint5446
quote:
I work on contract and have two assistants who work under me under contract as well, and we subcontract for two large home health providing agencies in the area. It's become pretty profitable quickly, and is netting about 1500-1900$ a week based on my actual visits and what I keep after I pay the assistants for their visits.
Congrats. Always good to see a business get up and going.
Poodle gives great tax advice so nothing to add there, but I think you've chosen a great field to start a business in. I think home healthcare/assisted living/nursing homes will be some the best investment areas to be in over the next 30 yrs.
Posted on 7/19/14 at 10:11 am to LSU0358
Yes I'm sole owner and poodle reinforced what I already thought I knew but wanted to make sure. Someone asked if it will be over 117k combined and the answer is yes. I think between W2 and 1099 it will fall somewhere between 120-130k before I begin taking deductions. Why is 117k significant?
Posted on 7/19/14 at 11:05 am to Saint5446
That is the maximum amount subject to Social Security tax.
Posted on 7/19/14 at 11:22 am to Poodlebrain
S-Corps do not have dividends. Sorry. You're going to pay ordinary income tax on distributions, and also on any retained earning even if they aren't distributed.
You could try to pay the tax rate on dividends, but I'd caution you against this. Basically because it would constitute tax fraud.
You could try to pay the tax rate on dividends, but I'd caution you against this. Basically because it would constitute tax fraud.
Posted on 7/19/14 at 5:15 pm to Iowa Golfer
quote:
S-Corps do not have dividends.
Probably was referring to distributions.
Posted on 7/19/14 at 5:35 pm to SippyCup
Good stuff here, thanks guys.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News