Solved

Any IT Consultant working as an S-Corp and not using a Tax professional? Preferably as a husband and wife team, but sole owner is fine.

Posted on 2014-01-27
4
292 Views
Last Modified: 2014-09-25
I would like to get some detailed information on how to setup and operate as an S-Corp, including how to handle payroll and tax issues. I would like to setup my own S-Corp and work CORP to CORP, and handle payroll and taxes myself. My wife will be doing all the paperwork, filing, finances, etc so it will be a 2 person corporation, I am thinking, 80/20% basis. These are just hypothetical #s. I would like to see if someone has similar experience and how they are managing it. Appreciate it.
0
Comment
Question by:BadHatHarry
  • 3
4 Comments
 
LVL 93

Accepted Solution

by:
John Hurst earned 500 total points
ID: 39812476
I work as a Corporation (but not an S-Corp). Both are incorporated but the S-Corp doles out all income to shareholders and does not pay tax.

So you need to incorporate. I used a lawyer to set up the corporation. Spouses work as one shareholder.

Check with an accountant, but the output is not just payroll, rather it is a distribution.

See this WikI article for some additional information.

http://en.wikipedia.org/wiki/S_corporation

I work as a regular corporation, have the corporation pay me and look after personal taxes myself. The corporation must file its own tax return.

I think that works better (at least for me) than passing all the income of the corporation to myself. I can do that via payroll if I wish.

... Thinkpads_User
0
 
LVL 13

Expert Comment

by:notacomputergeek
ID: 39813254
Why do you want to set up an S-Corp? If just to shield yourself from liability, an LLC will work fine and be less cost, less time to maintain, and possibly no separate tax return.

You can setup the LLC two ways: 1) as a sole-member (which would be just you) and business income/loss would be entered on your personal tax return, 2) multi-member LLC (you and your wife). The profit/loss would be determined for the company and then K-1s distributed, which are then entered on your personal tax return.

I have owned all three and see the value in each, but for a two person firm, try to keep it simple.

Many husband and wife businesses will also choose a multi-member LLC, since that's what insurance companies consider a "business" to sell you group coverage - it takes at least two owners. Doesn't matter if their married. The ACA threw a wrench in this, since there are no pre-existing conditions when seeking coverage. It's not as important as it used to be to jump from group to group coverage.
0
 
LVL 93

Expert Comment

by:John Hurst
ID: 39813383
A standard corporation also works very well. I have that myself. If costs a wee bit to set up but is more convenient to keep business affairs separate from personal.

I did not see any value in an S-Corp either.

.... Thinkpads_User
0
 
LVL 93

Expert Comment

by:John Hurst
ID: 39957599
@BadHatHarry - Any update on this?
0

Featured Post

Portable, direct connect server access

The ATEN CV211 connects a laptop directly to any server allowing you instant access to perform data maintenance and local operations, for quick troubleshooting, updating, service and repair.

Question has a verified solution.

If you are experiencing a similar issue, please ask a related question

Suggested Solutions

Phishing is at the top of most security top 10 efforts you should be pursuing in 2016 and beyond. If you don't have phishing incorporated into your Security Awareness Program yet, now is the time. Phishers, and the scams they use, are only going to …
Originally published Entrepreneur.com Booming numbers of freelancing professionals are changing the face of work. In the United States alone last year, the number of workers freelancing grew from 700,000 to 54 million, according to a Freelancers’…
This video shows the viewer how to set up and create Footnotes in their document. Click on the References tab: Select "Insert Footnote": Type in desired text:
This video shows where to find templates, what they are used for, and how to create and save a custom template using Microsoft Word.

828 members asked questions and received personalized solutions in the past 7 days.

Join the community of 500,000 technology professionals and ask your questions.

Join & Ask a Question