After a long talk with my tax guy, I'm looking to set up an S-Corp, but I'm wondering what everyone else on here is set up as and if there was a good reason why you chose that.
Are You Set Up As A Sole Proprietorship, LLC, Or S-Corp?
- Thread starter Fiver
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I'm a single member LLC which doesn't do shit except provide some legal protection against my personal assets.
I'm going to move over to an S-Corp though. Since you're a salaried employee under an S-Corp, you can pay yourself a reasonable salary, and then pay yourself a quarterly/annually bonus on which you aren't required to pay the 15% social security tax. This is all my understanding from talking to my CPA. There's a few more things involved with the S-Corp formation such as having a payroll service, company stock issuance etc. but none of it sounds too complicated.
I'm going to move over to an S-Corp though. Since you're a salaried employee under an S-Corp, you can pay yourself a reasonable salary, and then pay yourself a quarterly/annually bonus on which you aren't required to pay the 15% social security tax. This is all my understanding from talking to my CPA. There's a few more things involved with the S-Corp formation such as having a payroll service, company stock issuance etc. but none of it sounds too complicated.
I have one s-corp and one llc that was taxed as a partnership and i've now requested be taxed as an s-corp
I'm not an accountant so don't take my word for it and ask your accountant but this was my understanding of the S Corp vs. LLC.
With the S Corp, you can pay yourself a "reasonable salary" and then whatever you make above that, you can pay to yourself later in the year as dividends free of self employment tax. The thing that makes it a little more complicated is knowing what you're really saving.
For those of you with S Corps, what is a "reasonable salary" for affiliate marketing? Would the IRS consider you a CEO and say a reasonable salary is 200k+?
With the S Corp, you can pay yourself a "reasonable salary" and then whatever you make above that, you can pay to yourself later in the year as dividends free of self employment tax. The thing that makes it a little more complicated is knowing what you're really saving.
So if you make 200k, its not like you have to pay 15.3% on all of it even as an LLC. It would be 15.3% on up to $106,800 and then 2.9% on everything after. That 2.9% can add up to big bucks too though depending on your income it could be thousands or tens of thousands. Either way, the S Corp is an awesome tool on saving thousands. Might be worth the work depending on your situation.
For those of you with S Corps, what is a "reasonable salary" for affiliate marketing? Would the IRS consider you a CEO and say a reasonable salary is 200k+?
Im an SP but will prolly switch over to either an s-corp or an LLC
seems like s-corp might be worth it for the tax reasons
seems like s-corp might be worth it for the tax reasons
Offshore IBCs with several onshore (non-US) LLC equivalent acting as agents to offshore IBCs. Taxed 1% of AR.
I'm an S-Corp.
I can grab some money every month and claim it as "dividends". The taxes you pay on the dividends are considerably less than if you W-2 yourself. From what I remember, that was supposed to be one of the advantages.
If you haven't incorporated yet and your in the United States, you may want to find out if there is a "small business development center" in your area.
They can explain the pros and cons of each business entity better than any lawyer or accountant from my experience. They are hired by the state to incorporate businesses, help businesses get sba loans, etc. Basically a small business support system.
They are a free service to you.(unless you pay to go to one of those one night adult ed classes, which is worth it because they explain the pros & cons of each type of business entity).
They don't charge to incorporate you like an accountant or lawyer would. You only pay the actual cost involved with incorporating.
The people who run it are paid by the state to incorporate businesses to increase tax revenue.
Small Business Administration - sbdc_locator_map
I can grab some money every month and claim it as "dividends". The taxes you pay on the dividends are considerably less than if you W-2 yourself. From what I remember, that was supposed to be one of the advantages.
If you haven't incorporated yet and your in the United States, you may want to find out if there is a "small business development center" in your area.
They can explain the pros and cons of each business entity better than any lawyer or accountant from my experience. They are hired by the state to incorporate businesses, help businesses get sba loans, etc. Basically a small business support system.
They are a free service to you.(unless you pay to go to one of those one night adult ed classes, which is worth it because they explain the pros & cons of each type of business entity).
They don't charge to incorporate you like an accountant or lawyer would. You only pay the actual cost involved with incorporating.
The people who run it are paid by the state to incorporate businesses to increase tax revenue.
Small Business Administration - sbdc_locator_map