Looks like I may have to give up consulting
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You'll have to pay taxes? Oh heaven to Betsy!
Join the cool kids - Come fold with us[^]
I paid about $30k last year in taxes all said in done. Sure another $8k isn't much but hey, who cares, right? I am sure that we can all spare an extra 8k to the government. Just chump change really. Some years I think I would make more not working. I would definitely be home more.
Need custom software developed? I do custom programming based primarily on MS tools with an emphasis on C# development and consulting. A man said to the universe: "Sir I exist!" "However," replied the universe, "The fact has not created in me A sense of obligation." --Stephen Crane
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You'll have to pay taxes? Oh heaven to Betsy!
Join the cool kids - Come fold with us[^]
Business and employment taxation in the US isn't that simple. When paying someone a salary, there are additional taxes you pay, some of which are 100% matched by the company. (To make it more complicated, some things are deducted before this additional taxes are calculated--medical and 401k [retirement]--while others are deducted afterward.) To say the US tax code for corporations is complicated is a severe understatement. Like with other corporations, the S-Corp employee salary is an expense, thus reducing the profits of the S-Corp. The profits are then distributed to the shareholders and taxed as dividends. As I explain later, this law changes that to essentially require that ALL income from a small S-Corp be taxed as salary, even that portion which is dividend even if you pay the owner[s] competitive salaries.
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Business and employment taxation in the US isn't that simple. When paying someone a salary, there are additional taxes you pay, some of which are 100% matched by the company. (To make it more complicated, some things are deducted before this additional taxes are calculated--medical and 401k [retirement]--while others are deducted afterward.) To say the US tax code for corporations is complicated is a severe understatement. Like with other corporations, the S-Corp employee salary is an expense, thus reducing the profits of the S-Corp. The profits are then distributed to the shareholders and taxed as dividends. As I explain later, this law changes that to essentially require that ALL income from a small S-Corp be taxed as salary, even that portion which is dividend even if you pay the owner[s] competitive salaries.
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For those who don't know, the bill in question changes the rules for small S-Corporations to include ALL profits in the payroll tax. In other words, let's say you have an S-Corp with a single shareholder with which you do consulting. You pay yourself a reasonable salary comparable to what you would earn in the industry. For this salary, you pay both sides of social security (the employee and employer matching.) However, if you have income that exceeds that payroll, this bill would make you pay the payroll tax on all the retained income or the extra income given as dividends (even to non-salaried shareholders!) Granted, some people take advantage of S-Corps and pay a minimal salary, on which they pay payroll taxes, and then distribute the bulk of their income as dividends. On the other hand, many other S-Corps retain their profits for future expenses (which is what I did while running my S-Corp since my income was highly variable and I was funding some projects independent of my consulting. This would have resulted in outrageous double-taxation and destroyed my ability to build capital in my company.) So yes, S-Corps needed some refinement, but this is a sledgehammer. (Even worse, like many laws, some of the wording is so vague, it gives the IRS a tremendous amount of unchecked power.)
There is a similar thing in the UK called IR-35 because some people were claiming to make little more than minimum wage but their mortgage was paid on the business because they classified the house as business premises. They were worse than MPs!
Join the cool kids - Come fold with us[^]
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The one and only reason to own an S-Corp is being taken away. I think I will just go manage a McDonald's or something. Unless the filibuster holds. HR 4213[^]
Need custom software developed? I do custom programming based primarily on MS tools with an emphasis on C# development and consulting. A man said to the universe: "Sir I exist!" "However," replied the universe, "The fact has not created in me A sense of obligation." --Stephen Crane
You have my sympathies. No one in their right minds likes paying taxes! More importantly though, why on earth did the list in your link have votes listed by star-sign? I mean :wtf:
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
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There is a similar thing in the UK called IR-35 because some people were claiming to make little more than minimum wage but their mortgage was paid on the business because they classified the house as business premises. They were worse than MPs!
Join the cool kids - Come fold with us[^]
Trollslayer wrote:
their mortgage
Trollslayer wrote:
they classified the house as business premises.
Bet they didn't tell the building society that!
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The one and only reason to own an S-Corp is being taken away. I think I will just go manage a McDonald's or something. Unless the filibuster holds. HR 4213[^]
Need custom software developed? I do custom programming based primarily on MS tools with an emphasis on C# development and consulting. A man said to the universe: "Sir I exist!" "However," replied the universe, "The fact has not created in me A sense of obligation." --Stephen Crane
You're just a big, greedy corporation! It's about time you paid your "fair share!"
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You have my sympathies. No one in their right minds likes paying taxes! More importantly though, why on earth did the list in your link have votes listed by star-sign? I mean :wtf:
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
Henry Minute wrote:
No one in their right minds likes paying taxes!
If you could keep your income and social and community benefits with less taxes, that would be great. Most of the time, paying more taxes also means earning more income. And you object to that? :)
Luc Pattyn [Forum Guidelines] [Why QA sucks] [My Articles] Nil Volentibus Arduum
Please use < PRE > tags for code snippets, it preserves indentation, and improves readability.
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Henry Minute wrote:
No one in their right minds likes paying taxes!
If you could keep your income and social and community benefits with less taxes, that would be great. Most of the time, paying more taxes also means earning more income. And you object to that? :)
Luc Pattyn [Forum Guidelines] [Why QA sucks] [My Articles] Nil Volentibus Arduum
Please use < PRE > tags for code snippets, it preserves indentation, and improves readability.
An unemployed friend of mine once found a full, unopened wage packet lying in the road just outside the pub. He showed it to me and I congratulated him on his good luck. His only reply was "Good luck! Have you seen how much tax I've paid?"
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
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An unemployed friend of mine once found a full, unopened wage packet lying in the road just outside the pub. He showed it to me and I congratulated him on his good luck. His only reply was "Good luck! Have you seen how much tax I've paid?"
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
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That is very well possible; you shouldn't underestimate Henry's long-term memory. :)
Luc Pattyn [Forum Guidelines] [Why QA sucks] [My Articles] Nil Volentibus Arduum
Please use < PRE > tags for code snippets, it preserves indentation, and improves readability.
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The one and only reason to own an S-Corp is being taken away. I think I will just go manage a McDonald's or something. Unless the filibuster holds. HR 4213[^]
Need custom software developed? I do custom programming based primarily on MS tools with an emphasis on C# development and consulting. A man said to the universe: "Sir I exist!" "However," replied the universe, "The fact has not created in me A sense of obligation." --Stephen Crane
Two words, maybe three: Isle of Man[^]!
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I was still getting wage packets well into the late 20th century.
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
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Two words, maybe three: Isle of Man[^]!
Two words Cayman Islands[^].
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
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Two words Cayman Islands[^].
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
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The one and only reason to own an S-Corp is being taken away. I think I will just go manage a McDonald's or something. Unless the filibuster holds. HR 4213[^]
Need custom software developed? I do custom programming based primarily on MS tools with an emphasis on C# development and consulting. A man said to the universe: "Sir I exist!" "However," replied the universe, "The fact has not created in me A sense of obligation." --Stephen Crane
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Two words Cayman Islands[^].
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
It simply gives you credibility and coolness:
Software as it should be. ERL Consulting, Isle of Man
The first thought would be: These guys ain't joking they look like real men.
Compared to this:
Software as it should be. ERL Consulting, Cayman Islands
Yeah right! GTFO you Nigerian money-laundering crocks! Great, now the CP is broken. -- Modified Sunday, June 20, 2010 8:38 PM
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I was still getting wage packets well into the late 20th century.
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
Hear hear. Me too - these whippersnappers know nothing.
"WPF has many lovers. It's a veritable porn star!" - Josh Smith
As Braveheart once said, "You can take our freedom but you'll never take our Hobnobs!" - Martin Hughes.
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Business and employment taxation in the US isn't that simple. When paying someone a salary, there are additional taxes you pay, some of which are 100% matched by the company. (To make it more complicated, some things are deducted before this additional taxes are calculated--medical and 401k [retirement]--while others are deducted afterward.) To say the US tax code for corporations is complicated is a severe understatement. Like with other corporations, the S-Corp employee salary is an expense, thus reducing the profits of the S-Corp. The profits are then distributed to the shareholders and taxed as dividends. As I explain later, this law changes that to essentially require that ALL income from a small S-Corp be taxed as salary, even that portion which is dividend even if you pay the owner[s] competitive salaries.
Sounds a lot like IR35 that was implemented in the UK a few years back
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It simply gives you credibility and coolness:
Software as it should be. ERL Consulting, Isle of Man
The first thought would be: These guys ain't joking they look like real men.
Compared to this:
Software as it should be. ERL Consulting, Cayman Islands
Yeah right! GTFO you Nigerian money-laundering crocks! Great, now the CP is broken. -- Modified Sunday, June 20, 2010 8:38 PM
Mladen Jankovic wrote:
Great, now the CP is broken.
And I'm gonna tell them that it was you that broke it! ;P
Henry Minute Do not read medical books! You could die of a misprint. - Mark Twain Girl: (staring) "Why do you need an icy cucumber?" “I want to report a fraud. The government is lying to us all.” Why do programmers often confuse Halloween and Christmas? - Because 31 Oct = 25 Dec. Business Myths of the Geek #4 'What you think matters.'
