Tom, I wanted to reply to this before I sent my last remarks. Rather than employee, I've been a "subcontractor" to my corporation since it began. These CPAs say that since I work in the company this is not a good thing because the government doesnt get all its "due" through payroll taxes.
On Tue, Jun 8, 2010 at 12:56 AM, Tom DeReggi <wirelessn...@rapiddsl.net> wrote: >> Same subject, different question: Are you an employee of the corp? > > Good question. Again that depends. Depends on whether you are making money > or investing in money. > If you invest cash into a company, it usually makes sense to remove cash by > paying back the investment, to avoid being double taxed on your own money, > which would occur if you took payroll instead. If you are the sole owner of > a S-Corp it becomes more forgiving, because at the end of the day anything > you didn't take as salary, would tunnel to your personal income return > anyways. > But its really about what your tax braket and tax rate is for each entity, > and monthly estimated tax payments would be. It about adjusting it so the > least amount of tax paid upfront. > If you haven't injected investment into the company, and company is making > money, and you need money monthly to live, you may have no choice but to > take payroll as an employee, so you can take money out when you need it, > which is every month. Where as, if you live off another income source, you > may not need to be an employee, and just take the income at end of the > company tax year. It becomes mor complicated if multiple stock holders, as > Employee payroll can be a method of defining fair compensation for time > spent, before recognizing company profits. > I personally am not an employee of my company, I am a stockholder. It much > cleaner that way for my situation. > However, I warn caution to others on that. If you anticipate needing credit > for anything, so many credit things require proof of current historical > monthly income. > > Tom DeReggi > RapidDSL & Wireless, Inc > IntAirNet- Fixed Wireless Broadband > > > ----- Original Message ----- > From: "RickG" <rgunder...@gmail.com> > To: "WISPA General List" <wireless@wispa.org> > Sent: Monday, June 07, 2010 11:04 PM > Subject: Re: [WISPA] legal entity type - was taxes > > > Same subject, different question: Are you an employee of the corp? > > On Mon, Jun 7, 2010 at 1:55 PM, Travis Johnson <t...@ida.net> wrote: >> We are an S-corp and have been since the first day we started. It >> provides personal protection against people suing you, etc. It also >> allows expenses by the corporation that may or may not be allowed as a >> sole proprietor (additional office locations, etc.). >> >> Again, you would need to check with your accountant. They are the only >> ones that can give you exact information. >> >> Travis >> Microserv >> >> RickG wrote: >>> Its tempting to use a known CPA that is versed in our industry but >>> I've had issues dealing with those out of state. With that said, I'm >>> curious as to feedback on another issue. Who here is doing business as >>> a "sole proprietor"? I've been an "S-Corp" for years but considering >>> switching back due to its simplicity. This Corp stuff doesnt seem >>> worth all the hassle. >>> Thanks! >>> >>> On Fri, Jun 4, 2010 at 12:05 PM, Marlon K. Schafer <o...@odessaoffice.com> >>> wrote: >>> >>>> I'm with Travis on this one. Sometimes we take the entire hit at once, >>>> other times we spread it out. It kind of depends on what we need for >>>> deductions and what the equipment is. >>>> >>>> Our accountant has taken a lot of time to learn this industry and is >>>> really >>>> good. The phone number is 509.982.2922 if anyone is looking for a good >>>> one. >>>> >>>> laters, >>>> marlon >>>> >>>> ----- Original Message ----- >>>> From: "RickG" <rgunder...@gmail.com> >>>> To: "WISPA General List" <wireless@wispa.org> >>>> Sent: Thursday, June 03, 2010 11:55 AM >>>> Subject: Re: [WISPA] taxes >>>> >>>> >>>> >>>>> Travis, thanks for your input. I'm really looking for feedback as to >>>>> what our industry's standard is. I submit that the IRS does not look >>>>> at it as a "personal, business choice". I'd rather do it correctly now >>>>> than find out from the IRS I'm doing it wrong. >>>>> >>>>> On Thu, Jun 3, 2010 at 12:44 PM, Travis Johnson <t...@ida.net> wrote: >>>>> >>>>>> This is a personal, business choice. There is no set answer. Some of >>>>>> our >>>>>> equipment we expense and some we depreciate. It all depends on what >>>>>> tax >>>>>> breaks you need now vs. later. >>>>>> >>>>>> Travis >>>>>> Microserv >>>>>> >>>>>> >>>>>> RickG wrote: >>>>>> >>>>>>> Everyone's favorite subject :) >>>>>>> >>>>>>> I'm getting mixed information form my accountants on this and want to >>>>>>> know what everyone else is doing. The basic question is this: Are you >>>>>>> expensing or depreciating the equipment? Equipment being radios (AP & >>>>>>> CPE), antennas, switches, firewalls, etc. >>>>>>> With the cost of the electronics being so low, its not making much >>>>>>> sense to depreciate. Which takes me to a second question: Have any >>>>>>> WISPs been audited by the IRS for this reason? >>>>>>> >>>>>>> Thanks in advance! -RickG >>>>>>> >>>>>>> >>>>>>> -------------------------------------------------------------------------------- >>>>>>> WISPA Wants You! 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