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re: Unemployment question concerning LLC taxed as an SCorp
Posted on 5/18/20 at 7:17 pm to LSUFanHouston
Posted on 5/18/20 at 7:17 pm to LSUFanHouston
It’s not a sham at all. A ton of S CORPS are one man shows. Look it up. Perfectly legal. If he filed his stuff right he will be fine. You act as if the poor guy is doing illegal acts. Lmao. It’s not silly at all if you get 1099-misc at end of year paid to a s- Corp by filling out a W9. This is done all the time. Especially in O&G. Especially if you want tax savings by being an employee of your company. That is how some things work in certain industries. All about legal tax structure. Why the frick should he be forced to pay all that self employment tax as only an independent contractor only? Way more business expense deductions with s Corp. I’m sure glad you are not my CPA. YOU should know better.
This post was edited on 5/18/20 at 8:32 pm
1
Posted on 5/18/20 at 9:20 pm to Fat Bastard
From your posts I know you are rather aggressive, which is fine.
The problem is when contractors net $100K and pay themselves a salary of 20K and draws of 80K.
What can you tell me about reasonable salary? That’s where the one man service shops get in trouble,
The fact it’s done “all the time” is due to a lack of enforcement, not playing by the rules.
I’ve seen maybe 2 percent blow up. So yes a low percentage, but when it does, it is ugly.
My job is to keep my clients in the financial place that minimizes their tax burden but can survive an audit. I’ve fired clients for being too aggressive and clients have fired me for not being aggressive enough. So I am probably not a good match for you as a CPA, because I DO know better =)
Odds are you and the OP will never get audited. But if you do and you aren’t paying yourself a reasonable salary, prepare thy anus.
Also, business deductions are the same, There are no deductions available to S Corp that isn’t available to Schedule C. if your CPA doesn’t know that, maybe you need to pay more for better advice!!
The problem is when contractors net $100K and pay themselves a salary of 20K and draws of 80K.
What can you tell me about reasonable salary? That’s where the one man service shops get in trouble,
The fact it’s done “all the time” is due to a lack of enforcement, not playing by the rules.
I’ve seen maybe 2 percent blow up. So yes a low percentage, but when it does, it is ugly.
My job is to keep my clients in the financial place that minimizes their tax burden but can survive an audit. I’ve fired clients for being too aggressive and clients have fired me for not being aggressive enough. So I am probably not a good match for you as a CPA, because I DO know better =)
Odds are you and the OP will never get audited. But if you do and you aren’t paying yourself a reasonable salary, prepare thy anus.
Also, business deductions are the same, There are no deductions available to S Corp that isn’t available to Schedule C. if your CPA doesn’t know that, maybe you need to pay more for better advice!!
This post was edited on 5/18/20 at 9:22 pm
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