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Anyone here married to a tax person?

Discussion in 'The Lounge' started by BranndonC, Aug 31, 2006.

  1. BranndonC

    BranndonC 3/4 ton status

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    I want to know what I should do with my money for tax reasons and where I'll be taxed the least.
    Heres the situation. I'm a realtor now. I get paid straight from the sale, so I am technicaly self employed. I have a Corporation in my name. Should I have all the money go into the corp account, then pay myself via a paycheck company from that? Aren't I paying taxes twice that way?
     
  2. gjk5

    gjk5 3/4 ton status

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    You can do that, my suggestion is to put all of the money in a corporate account, pay all expenses that you can justify as company related (car, gas, advertising, meals, dues, fees etc) and then salary yourself ffrom the remainder or, even better; take a corporate disbursment of profits as an officer which you do not have to pay fica or payroll taxes on.



    BTW: DO NOT hire a payroll company for yourself, just go buy quickbooks and order printable checks and do it yourself, it's a breeze.


    You're welcome to PM me with any questions, I've owned my own small corp. for 6 years (mortgage and recently real estate and development) and never been audited or had tax problems.
     
  3. BranndonC

    BranndonC 3/4 ton status

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    I will have my wife working with me... and we will be hiring people also. I already have a payroll company that I've been working with for a long time, but the past year or so they haven't had to do anything because we didn't make anything! lol but I'm not getting taxed twice this way?
    ok, say I get 1,000 paid into my account via a sale.

    do I have to get taxed 20% on that, then pay myself out of that, and then get taxed 30% on what I paid my self?
     
  4. Skigirl

    Skigirl 1/2 ton status

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    Are you a C corp?? If so, you shouldn't be. Set up an LLC. Has the tax advantages you need plus whatever you don't pay yourself in salary is passed through to you instead of being taxed in the company. You use a C corp to park revenue for other purposes, but not to use as a salary vehicle. Call me if you want to know more about cool Corp uses.
     
  5. gjk5

    gjk5 3/4 ton status

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    No. If you are paid as a corporation you pay taxes only on your "net", so when you file your taxes at the end of the year your company's tax liability is based on your net after write off, expenses, depreciation etc.


    You PERSONALLY will only be liable for the taxes on your salary or disbursements.
     
  6. Skigirl

    Skigirl 1/2 ton status

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    If there is net profit in a C corp. there is a tax liability for the corp. It is not a pass through entity. Then there'd be an additional tax on salary or distribution to Branndon. Only way to avoid tax on a C corp. net is to not have any net profit. But that means structuring deductions so that they are deducted completely and not 50%, like meals and entertainment, or assets, which have only the depreciation once the current increased deduction for equip. ends.

    It's just easier to use an LLC for the company entity that you want to take salary from, and use a C corp. as an entity to fund other ventures. An LLC allows for distribution and salary without assessing a tax on net left in the company. That profit is just passed on to the shareholders.
     
  7. BranndonC

    BranndonC 3/4 ton status

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    I have a sole proprietor ship (how ever its spelled)Skigirl, could you PM me your phone number?
     
  8. Skigirl

    Skigirl 1/2 ton status

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    You gotta get out of a sole proprietorship. Anything is better. You have no protection iwth that entity or with a partnership. A limited partnership is OK (LLP). An LLC is good. A C corp is cool for some things.
     
  9. HarryH3

    HarryH3 1 ton status Author

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    You need to find a copy of the book "Inc. and Grow Rich" Check your library and you may get to read it for free. It will explain why you NEVER want to be a Sole Proprietor and the advantages and disadvantages of the different corporation types.
     
  10. Fubeca

    Fubeca 1/2 ton status

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    Unless you want to be listed on a stock exchange sometime you really probably don't want to be a C-corp. I agree with Skigirl.

    I'm a tax accountant - and for tax purposes you would likely be best served as an S-corp or an LLC. If you are going to make any real money - you should really talk to a lawyer and make sure you are aware of all the issues surrounding entity types.

    You could also ask around with your realtor friends and see what they did. It is a very common business so you shouldn't need to reinvent the wheel. Good luck!
     

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