DID YA HEAR? 80% of the over 250K crowd is "Small Business"!

[KittenKoder]

Yes, but it would be smarter for them to organize as an LLC!

Yep--there are many of those too. Right now, even realtors whom are working out of a brokers office are opting to be sub-S corporations--just for the protection of it.

Again, unfortunately there are too many experts out there looking for vulnerable sole proprietors to sue. In fact, some make a living out of it.

The S-corp & the LLC's offer deterance.

You strike me as extremely paranoid.

Welcome to the modern world.

 

[oreo]

What is the advantage in doing such, verses just being in business for yourself, without the incorporation?

The main two are your personal assets can't be touched if your business is sued, and you don't pay payroll taxes on income that is paid from the corporation to you other than your salary. As far as I can see, this isn't going to change...so the bogus claims that Oreo made at the beginning of this thread are just that--bogus.

Before you reply to me again--you might want to go back & read "all" of page 8 in this thread. I have explained in detail what an S corporation is, & how income is distributed to the owners.

Obviously if I were paranoid, I would have never started any business in the first place. Your statement that sole proprietors cannot lose their 2 most valuable assets over a lawsuit is a crock of B.S. I have seen it happen. That's why people in business incorporate.

As far as expanding capital expenditures-- What are you talking about? S-corp stock is no par value, therefore not traded publicly in our financial markets. Your capital expenditures increase does not apply here. All business expenses are deductible in an S corporation, no matter how much they amount to.

It must be real hard for you to appear intelligent about something you obviously know NOTHING about. Therefore, you resort to calling business owners "paranoid" for incorporating their businesse's. Unbelievable.

 

[jreeves]

President Obama will make the wealthy pay their share of Income Tax. Thank God someone with brains is running your country for a change. Eight years of lies, deceit, theft, war, corruption, and hate will be replaced with PEACE, LOVE, and PROSPERITY.

God Bless Obama !

I am so sick of this "fair share" bull shit.

1999 the top 5% paid 55.45% of all income taxes and the bottom 95% paid 44.55%
2000 the top 5% paid 56.47% of all income taxes and the bottom 95% paid 43.53%
2001 the top 5% paid 53.25% of all income taxes and the bottom 95% paid 46.75%
2002 the top 5% paid 53.80% of all income taxes and the bottom 95% paid 46.20%
2003 the top 5% paid 54.36% of all income taxes and the bottom 95% paid 45.64%
2004 the top 5% paid 57.13% of all income taxes and the bottom 95% paid 42.87%
2005 the top 5% paid 59.67% of all income taxes and the bottom 95% paid 40.33%
2006 the top 5% paid 60.14% of all income taxes and the bottom 95% paid 39.86%

Seems to me the top 5% are paying more than their fair share.

Who Pays Income Taxes? See Who Pays What

That's because the top 5% are a lot richer now than they were in 1999. The actual tax rates have gone DOWN since then

Hmm...so if the top 5% are paying more of the total tax with lower tax rates? Then tax rate cuts actually stimulated growth in wealth in that class(the rich). It seems we should be cutting tax rates across the board if we really want to stimulate the economy. Afterall, growth of wealth should be our goal,right(in every class)?

 

[Ravi]

What is the advantage in doing such, verses just being in business for yourself, without the incorporation?

The main two are your personal assets can't be touched if your business is sued, and you don't pay payroll taxes on income that is paid from the corporation to you other than your salary. As far as I can see, this isn't going to change...so the bogus claims that Oreo made at the beginning of this thread are just that--bogus.

Before you reply to me again--you might want to go back & read "all" of page 8 in this thread. I have explained in detail what an S corporation is, & how income is distributed to the owners.

Obviously if I were paranoid, I would have never started any business in the first place. Your statement that sole proprietors cannot lose their 2 most valuable assets over a lawsuit is a crock of B.S. I have seen it happen. That's why people in business incorporate.

As far as expanding capital expenditures-- What are you talking about? S-corp stock is no par value, therefore not traded publicly in our financial markets. Your capital expenditures increase does not apply here. All business expenses are deductible in an S corporation, no matter how much they amount to.

It must be real hard for you to appear intelligent about something you obviously know NOTHING about. Therefore, you resort to calling business owners "paranoid" for incorporating their businesse's. Unbelievable.

LOL! I called you paranoid about your belief that lawyers are out there watching you to find a reason to sue you. The rest of your post contains things you've attributed to me that I never said...not only are you paranoid, you're a fool and a chimp. Your OP was bogus, cookie, totally bogus. As are your assertions that the majority of small business owners have an income of $250,000. How many sites do you troll on with these lies?

 

[rayboyusmc]

2% will be affected.

 

[Care4all]

I am so sick of this "fair share" bull shit.

1999 the top 5% paid 55.45% of all income taxes and the bottom 95% paid 44.55%
2000 the top 5% paid 56.47% of all income taxes and the bottom 95% paid 43.53%
2001 the top 5% paid 53.25% of all income taxes and the bottom 95% paid 46.75%
2002 the top 5% paid 53.80% of all income taxes and the bottom 95% paid 46.20%
2003 the top 5% paid 54.36% of all income taxes and the bottom 95% paid 45.64%
2004 the top 5% paid 57.13% of all income taxes and the bottom 95% paid 42.87%
2005 the top 5% paid 59.67% of all income taxes and the bottom 95% paid 40.33%
2006 the top 5% paid 60.14% of all income taxes and the bottom 95% paid 39.86%

Seems to me the top 5% are paying more than their fair share.

Who Pays Income Taxes? See Who Pays What

That's because the top 5% are a lot richer now than they were in 1999. The actual tax rates have gone DOWN since then

Hmm...so if the top 5% are paying more of the total tax with lower tax rates? Then tax rate cuts actually stimulated growth in wealth in that class(the rich). It seems we should be cutting tax rates across the board if we really want to stimulate the economy. Afterall, growth of wealth should be our goal,right(in every class)?

Because our economic growth went ONLY to that group.....that's not a good or healthy economic policy...where on those at the very very top, aquire more wealth while those in the middle, lose wealth.....

If the top gained alot of wealth and all of the middle gained wealth and even the poor gained some wealth, then we would have a sound economy and functioning tax policy imo....this is our goal, as a country, on the whole.

It wouldn't matter that much if the very top was gaining wealth at a faster pace, as long as all are gaining wealth... from all the classes as well...again, imo.

care

 

[rayboyusmc]

Some people can't understand win-win.

Reagan was one of those with his Piddled on Theory. Even this was a repeat from the past.

The horse eats as many oats as he wants and the sparrow might find some edible oats left in the horse manure. More accurate a picture than trickle down.

 

[DiveCon]

That's because the top 5% are a lot richer now than they were in 1999. The actual tax rates have gone DOWN since then

Hmm...so if the top 5% are paying more of the total tax with lower tax rates? Then tax rate cuts actually stimulated growth in wealth in that class(the rich). It seems we should be cutting tax rates across the board if we really want to stimulate the economy. Afterall, growth of wealth should be our goal,right(in every class)?

Because our economic growth went ONLY to that group.....that's not a good or healthy economic policy...where on those at the very very top, aquire more wealth while those in the middle, lose wealth.....

If the top gained alot of wealth and all of the middle gained wealth and even the poor gained some wealth, then we would have a sound economy and functioning tax policy imo....this is our goal, as a country, on the whole.

It wouldn't matter that much if the very top was gaining wealth at a faster pace, as long as all are gaining wealth... from all the classes as well...again, imo.

care

more BULLSHIT

 

[manu1959]

why is it ok to take from one group and give it to another.....

 

[KittenKoder]

why is it ok to take from one group and give it to another.....

Thus is the part of logic that escapes many of the wingnuts on both sides, the problem though is that the wingnuts are the ones now making the policies and laws.

 

[Meister]

I don't know where the propaganda came from where only the wealthy got wealthier...I have my suspicions though. I'm middle class and I'm wealthier than I was in the 1980's, and 1990's, and so far this decade. I know there are less poor than there was in those years, also. But, what a group of people can do to skew the "facts", is just raise the bar. This is what has happened.
Now, the "poor' have multi Televisions, most drive cars, they don't live in tents for the most part. They are well fed, we don't have soup lines. I'm not saying that we don't have poverty, every culture has that. Buit do try and go to africa...now there they have poor. So when I hear that only the rich got wealthier I have to say bull..... shit.
Can I bring up those big corporations??? Those are the ones that employ millions of people, and their stocks are in 401K's, and mutual funds, where a good portion of America benefited from,, up until a 1 1/2-2 years ago. So those on the left just keep bashing what's going on, that is your right to do in this free country. But, if it goes in the direction you want...you may not be able to that so freely. Just my thought on this subject.

 

[sealybobo]

Some people can't understand win-win.

Reagan was one of those with his Piddled on Theory. Even this was a repeat from the past.

The horse eats as many oats as he wants and the sparrow might find some edible oats left in the horse manure. More accurate a picture than trickle down.

Last week I said Republicans own the illegal immigrant problem because it is these small business' that are hiring the illegals.

Then the right wingers came back and said, "bobo thinks all small business' are Republican owned".

Well wouldn't you say 80% are owned by Republicans?

 

[Tech_Esq]

A company having 500 employees, is not claiming their taxes on individual income taxes are they? Even the owner/owners of something this big is probably paying themselves a salary within the company structure....so no, they would not be included in on the income tax hike of obama's other than giving themselves a salary that might be affected by it imo.

do they take their extra profit each year of the business all for themselves and not reinvest in the company?*

care

If you are asking that about S corps, it doesn't matter. Even if an S corp owner leaves the profit in the company, he still has to claim the that profit as income on his individual tax return.

if he takes his profit from the company and claims it on his individual income tax....does he also have to pay Social Security and medicare taxes on it? Or only if he pays himself within the company a salary is SS taxes paid?

how large or small, of a company, can an S-corp be, do you know?

care

As I have an S corp and am just going through the process of moving myself and my clients from my employer to my S corp and the resultant revenues will exceed $250,000, I have been uniquely paying attention to this issue.

First, I will have to pay quarterly estimated income taxes on the revenue coming into the business. I will have a salary. The game is to pay yourself the least amount but still be within the IRS's definition of paying yourself a "reasonable amount" for whatever someone in your position does. For me that will be about $40k less than I'm making now as an employee. My wife will also make a salary. She's a web programmer and our combined incomes will equal my current income. We will owe payroll taxes on the amount we pay ourselves.

Since I have to pay quarterly taxes on everything that comes in the door and make it up at the end if I missed anything, therefore whether I choose to leave the revenue for that year in the business or whether I take it as a draw later is not a taxable event. Further, since it is not a salary, it is not subject to payroll taxes. This is a benefit of 5.9% on that money.

I have another appointment with my tax guy on Friday so I might have more to add.

 

[Tech_Esq]

Some people can't understand win-win.

Reagan was one of those with his Piddled on Theory. Even this was a repeat from the past.

The horse eats as many oats as he wants and the sparrow might find some edible oats left in the horse manure. More accurate a picture than trickle down.

Last week I said Republicans own the illegal immigrant problem because it is these small business' that are hiring the illegals.

Then the right wingers came back and said, "bobo thinks all small business' are Republican owned".

Well wouldn't you say 80% are owned by Republicans?

No way. There are plenty of fat cat Dems. You do know that the two richest men in the world are Dems right bobo?

 

[Ravi]

If you are asking that about S corps, it doesn't matter. Even if an S corp owner leaves the profit in the company, he still has to claim the that profit as income on his individual tax return.

if he takes his profit from the company and claims it on his individual income tax....does he also have to pay Social Security and medicare taxes on it? Or only if he pays himself within the company a salary is SS taxes paid?

how large or small, of a company, can an S-corp be, do you know?

care

As I have an S corp and am just going through the process of moving myself and my clients from my employer to my S corp and the resultant revenues will exceed $250,000, I have been uniquely paying attention to this issue.

First, I will have to pay quarterly estimated income taxes on the revenue coming into the business. I will have a salary. The game is to pay yourself the least amount but still be within the IRS's definition of paying yourself a "reasonable amount" for whatever someone in your position does. For me that will be about $40k less than I'm making now as an employee. My wife will also make a salary. She's a web programmer and our combined incomes will equal my current income. We will owe payroll taxes on the amount we pay ourselves.

Since I have to pay quarterly taxes on everything that comes in the door and make it up at the end if I missed anything, therefore whether I choose to leave the revenue for that year in the business or whether I take it as a draw later is not a taxable event. Further, since it is not a salary, it is not subject to payroll taxes. This is a benefit of 5.9% on that money.

I have another appointment with my tax guy on Friday so I might have more to add.

What do you mean it isn't a taxable event? You will have to pay income taxes on that money whether you take it as a draw or leave it in the business.

On your quarterly payments...even if your business slows down you must base your payments on what you earned the previous year. Of course, you'll get a refund if you overpay.

 

[Tech_Esq]

if he takes his profit from the company and claims it on his individual income tax....does he also have to pay Social Security and medicare taxes on it? Or only if he pays himself within the company a salary is SS taxes paid?

how large or small, of a company, can an S-corp be, do you know?

care

As I have an S corp and am just going through the process of moving myself and my clients from my employer to my S corp and the resultant revenues will exceed $250,000, I have been uniquely paying attention to this issue.

First, I will have to pay quarterly estimated income taxes on the revenue coming into the business. I will have a salary. The game is to pay yourself the least amount but still be within the IRS's definition of paying yourself a "reasonable amount" for whatever someone in your position does. For me that will be about $40k less than I'm making now as an employee. My wife will also make a salary. She's a web programmer and our combined incomes will equal my current income. We will owe payroll taxes on the amount we pay ourselves.

Since I have to pay quarterly taxes on everything that comes in the door and make it up at the end if I missed anything, therefore whether I choose to leave the revenue for that year in the business or whether I take it as a draw later is not a taxable event. Further, since it is not a salary, it is not subject to payroll taxes. This is a benefit of 5.9% on that money.

I have another appointment with my tax guy on Friday so I might have more to add.

What do you mean it isn't a taxable event? You will have to pay income taxes on that money whether you take it as a draw or leave it in the business.

On your quarterly payments...even if your business slows down you must base your payments on what you earned the previous year. Of course, you'll get a refund if you overpay.

Mean, and said, that I'd already paid taxes on the money (quarterly estimated) so whatever I choose to do with that money, it will not be subject to another tax (like payroll taxes). Therefore, there is not a subsequent taxable event to my taking it as a draw whether I do it in year 1 or year 3.

Example: I have $200k revenue in year 1. I pay out $100k in salary and $20k in other expenses. I have $80k left in profit. I've already paid taxes on the money during the year. At some point in that year I take a $20k draw. I owe no additional tax on that.

Next year I have similar income. I take another $20k draw. Since I paid taxes on that money in the previous year, I owe no tax on the money when I take it in year two. The same goes for any money I may take in the future of the remaining $40k from year 1.

That's all I was saying.

Some of my contracts will have me consulting with public housing authorities. Do you see that slowing down? Yeah, me neither.

 

[oreo]

if he takes his profit from the company and claims it on his individual income tax....does he also have to pay Social Security and medicare taxes on it? Or only if he pays himself within the company a salary is SS taxes paid?

how large or small, of a company, can an S-corp be, do you know?

care

As I have an S corp and am just going through the process of moving myself and my clients from my employer to my S corp and the resultant revenues will exceed $250,000, I have been uniquely paying attention to this issue.

First, I will have to pay quarterly estimated income taxes on the revenue coming into the business. I will have a salary. The game is to pay yourself the least amount but still be within the IRS's definition of paying yourself a "reasonable amount" for whatever someone in your position does. For me that will be about $40k less than I'm making now as an employee. My wife will also make a salary. She's a web programmer and our combined incomes will equal my current income. We will owe payroll taxes on the amount we pay ourselves.

Since I have to pay quarterly taxes on everything that comes in the door and make it up at the end if I missed anything, therefore whether I choose to leave the revenue for that year in the business or whether I take it as a draw later is not a taxable event. Further, since it is not a salary, it is not subject to payroll taxes. This is a benefit of 5.9% on that money.

I have another appointment with my tax guy on Friday so I might have more to add.

What do you mean it isn't a taxable event? You will have to pay income taxes on that money whether you take it as a draw or leave it in the business.

On your quarterly payments...even if your business slows down you must base your payments on what you earned the previous year. Of course, you'll get a refund if you overpay.

Since "profit", is considered K-1 or dividend income--it is taxed but one does not have to pay FICA taxes (social security & medicare taxes) on it. The income or salary of the owner is taxed with FICA taxes. Profit is determined at year end & that automatically flows to the owner/owners as dividend--K-1 investment income, just like a retiree or other who owns a stock that pays dividends. If a loss is shown, rather than profit--that will be written off against the following years profit, (if any).

I think this thread has nailed down suffciently what an S-corporation is. Again it can be an individual owner or a company with hundreds of employees. They are your doctor's offices, your dentist offices, your construction industry from A to Z, your auto mechanics, your local trash collection company.

Since I have been a sub-S corporation--(electrical contractor) for more than 30 years, I have detailed exactly how it is structured on page 8 of this thread.

The point of this thread is that 250K is very easily made by many of the above mentioned. At a 40% federal income tax rate & then an estimated 10% of state income tax, it is apparent that a sub-S corporation or the owners of that corporation will be thrust into a 50% tax bracket--(only bringing home .50 cents on every dollar) they show in income on their 1040's--regardless if it is earned income (salary) or (investment income) dividends from their business.

When taxes are raised on the largest employer in this country--they only do one thing. They cut back on expenditures for new equipment or expansion of their businesse's--then come the employee lay-offs. Simply put, they go into "survival mode".

 

[manu1959]

As I have an S corp and am just going through the process of moving myself and my clients from my employer to my S corp and the resultant revenues will exceed $250,000, I have been uniquely paying attention to this issue.

First, I will have to pay quarterly estimated income taxes on the revenue coming into the business. I will have a salary. The game is to pay yourself the least amount but still be within the IRS's definition of paying yourself a "reasonable amount" for whatever someone in your position does. For me that will be about $40k less than I'm making now as an employee. My wife will also make a salary. She's a web programmer and our combined incomes will equal my current income. We will owe payroll taxes on the amount we pay ourselves.

Since I have to pay quarterly taxes on everything that comes in the door and make it up at the end if I missed anything, therefore whether I choose to leave the revenue for that year in the business or whether I take it as a draw later is not a taxable event. Further, since it is not a salary, it is not subject to payroll taxes. This is a benefit of 5.9% on that money.

I have another appointment with my tax guy on Friday so I might have more to add.

What do you mean it isn't a taxable event? You will have to pay income taxes on that money whether you take it as a draw or leave it in the business.

On your quarterly payments...even if your business slows down you must base your payments on what you earned the previous year. Of course, you'll get a refund if you overpay.

Since "profit", is considered K-1 or dividend income--it is taxed but one does not have to pay FICA taxes (social security & medicare taxes) on it. The income or salary of the owner is taxed with FICA taxes. Profit is determined at year end & that automatically flows to the owner/owners as dividend--K-1 investment income.

or the profits are bonused out to the owners and or staff.....and the k-1 is diminimus.....

 

[Ravi]

As I have an S corp and am just going through the process of moving myself and my clients from my employer to my S corp and the resultant revenues will exceed $250,000, I have been uniquely paying attention to this issue.

First, I will have to pay quarterly estimated income taxes on the revenue coming into the business. I will have a salary. The game is to pay yourself the least amount but still be within the IRS's definition of paying yourself a "reasonable amount" for whatever someone in your position does. For me that will be about $40k less than I'm making now as an employee. My wife will also make a salary. She's a web programmer and our combined incomes will equal my current income. We will owe payroll taxes on the amount we pay ourselves.

Since I have to pay quarterly taxes on everything that comes in the door and make it up at the end if I missed anything, therefore whether I choose to leave the revenue for that year in the business or whether I take it as a draw later is not a taxable event. Further, since it is not a salary, it is not subject to payroll taxes. This is a benefit of 5.9% on that money.

I have another appointment with my tax guy on Friday so I might have more to add.

What do you mean it isn't a taxable event? You will have to pay income taxes on that money whether you take it as a draw or leave it in the business.

On your quarterly payments...even if your business slows down you must base your payments on what you earned the previous year. Of course, you'll get a refund if you overpay.

Mean, and said, that I'd already paid taxes on the money (quarterly estimated) so whatever I choose to do with that money, it will not be subject to another tax (like payroll taxes). Therefore, there is not a subsequent taxable event to my taking it as a draw whether I do it in year 1 or year 3.

Example: I have $200k revenue in year 1. I pay out $100k in salary and $20k in other expenses. I have $80k left in profit. I've already paid taxes on the money during the year. At some point in that year I take a $20k draw. I owe no additional tax on that.

Next year I have similar income. I take another $20k draw. Since I paid taxes on that money in the previous year, I owe no tax on the money when I take it in year two. The same goes for any money I may take in the future of the remaining $40k from year 1.

That's all I was saying.

Some of my contracts will have me consulting with public housing authorities. Do you see that slowing down? Yeah, me neither.

I'm not sure if I'm understanding you properly, but if you mean that once you pay taxes on any profit you don't need to pay it again, you are correct. It seemed you were saying you didn't have to pay taxes on it unless you drew it out.

 

[sealybobo]

Some people can't understand win-win.

Reagan was one of those with his Piddled on Theory. Even this was a repeat from the past.

The horse eats as many oats as he wants and the sparrow might find some edible oats left in the horse manure. More accurate a picture than trickle down.

Last week I said Republicans own the illegal immigrant problem because it is these small business' that are hiring the illegals.

Then the right wingers came back and said, "bobo thinks all small business' are Republican owned".

Well wouldn't you say 80% are owned by Republicans?

No way. There are plenty of fat cat Dems. You do know that the two richest men in the world are Dems right bobo?

Yea, but in general, aren't most service men and small business owners GOP?

I would love to claim them. I just don't think most of them are liberals.

Now a lot switched to the Dems after Bush. I know a lot of them. It was a long hard process, but eventually they all abandoned the GOP.

Only die hards are still Republicans.