If you are a subcontractor, you pay the entire 15% yourself. Subcontracting does not eliminate or reduce any social security tax obligation. It only alters who pays it.
Dave RickG <rgunder...@gmail.com> wrote: If I understand correctly, social security tax is 15%. In an employment situation, an employee pays 7.5% and the employer matches pays the other 7.5%. If you subcontract, you only pay 7.5% and the corp pays nothing. On Tue, Jun 8, 2010 at 11:27 PM, Scottie Arnett <sarn...@info-ed.com> wrote: > The 7.5% comes back in on self-employment tax. That is the social security > tax on the self-employed. > > Scottie > >> But, they're not getting unemployment taxes, and they loose 7.5% on >> social security taxes... >> >> On Tue, Jun 8, 2010 at 12:29 PM, Jerry Richardson >> <jrichard...@aircloud.com> wrote: >>> Yeah but they get it through self employment taxes. >>> >>> -----Original Message----- >>> From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On >>> Behalf Of RickG >>> Sent: Tuesday, June 08, 2010 8:03 AM >>> To: WISPA General List >>> Subject: Re: [WISPA] legal entity type - was taxes >>> >>> 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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