What is best way to set up tax structure for a job paid purely as a 1099? Sub-S? Corp?

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You’ll save taxes on your w2 side and company distribution side.

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You'll also probably get less cash so if they need the money, it may not be the best option.

OP, you need to sit down with a competent advisor, probably CPA, and let them help you decide what is best for you.

My CPA has consistently advised against the S-corp route for my substantial 1099 Never has felt right - probably need a 2nd opinion.

You can definitely save money on the SS side of taxes. Dividend distributions from an S Corp are not subject to self-employment taxes. You can also run a lot of expenses through, particularly if you are the sole employee. The downside is that you have a lot of additional forms and reports to file.

Yup. Not only did I save a ton of taxes on w2 side my distribution side was tax free after deductions. You should never want all that taxed on the 1099. Not even all on your own w2. You want stuff on distribution side. Cash is cash doesn’t matter what side it comes from. A cpa can handle all this for him.

Also keep in mind different states have different tax laws. The Fact that S Corp income is hit for 6.5% excise tax in TN means it’s not as big a slam dunk as it would be in other states.

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My CPA has consistently advised against the S-corp route for my substantial 1099 Never has felt right - probably need a 2nd opinion.

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The concept behind S Corp payroll taxation is that an S-Corp shareholder-employee wears two hats.

1) They are an employee who is using their individual talents to do a job (they are an engineer, a doctor, a lawyer, a carpenter, whatever)

2) They are a shareholder who manages other employees and the business itself.

There are some CPAs out there who will not work with an S corp that doesn't have any employees outside the shareholder-employee.

The idea is that... if it's just you, and you aren't managing anyone else, then you really aren't any different than being self-employed. And so therefore... they believe an S Corp is basically payroll tax evasion, and they won't touch it.

The fact is... just like home office deduction (which some CPAs will never touch either), there is a TON of fraud and silliness in the S Corp world where there is only one shareholder-employee and no other employees.

It is because the IRS has never defined, or even really litigated, what is a "reasonable salary".

I've seen some people try to justify that for a attorney who is self-employed with no other employees and nets 400K a year... that 50K is a reasonable salary and the rest should be distributions.

The IRS has never really gone after this, though.

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The fact is... just like home office deduction (which some CPAs will never touch either), there is a TON of fraud and silliness in the S Corp world where there is only one shareholder-employee and no other employees.

It is because the IRS has never defined, or even really litigated, what is a "reasonable salary

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Yup which is why I haven't touched it personally. Unless you have some type of "passive" income to the business that's not reliant on day to day activities of the producer its hard to justify a low reasonable salary in a one man show. In my profession, the cpas that do it will recommend at least paying the max SS and Medicare tax amount. So you need to make a good chunk over that amount to make up for the administrative costs of a scorp. All in all may save a thousand or two, but not sure it's worth the audit risk.

If I ever hire someone whether w2 or 1099 then I might switch to an scorp at that time

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Quickbooks payroll. It’s worth it.

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Plus the cost of the S Corp return

Plus some states charge additional annual fees for S corps

If wife's business is selling widgets, S corp may save payroll taxes. If it is a service business and 100% of revenue is attributable to your wife's personal services, it probably won't save payroll/SE taxes, per the IRS and Tax Court rulings.

Also, are you factoring in the Qualified Business Income deduction? As a S corp, your QBI deduction is limited by the amount of W-2 wages you pay. Usually net's out a wash--amount of payroll tax savings vs. lost QBI deduction.

Hire a tax professional to run numbers.