Looks like I may have to give up consulting
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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.'
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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.)
Just reorganize as an LLC and your problem is fixed. If the bill only affects S-Corps then you are home free. LLCs can elect to be taxed as either Partnerships (Like the way S-Corps were taxed) or C-Corporations, and they can elect one time to change that taxation status. I've run several businesses and the LLC is by far the best and most flexible form of business. There really is no good reason to be an S-Corp anyway, since there are so many restrictions on number of shareholders, plus the complexity of running a corporate structure. With an LLC you get the relative informality of a partnership with the liability protections of a C-Corp.
Daniel Petersen
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You'll have to pay taxes? Oh heaven to Betsy!
Join the cool kids - Come fold with us[^]
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Just reorganize as an LLC and your problem is fixed. If the bill only affects S-Corps then you are home free. LLCs can elect to be taxed as either Partnerships (Like the way S-Corps were taxed) or C-Corporations, and they can elect one time to change that taxation status. I've run several businesses and the LLC is by far the best and most flexible form of business. There really is no good reason to be an S-Corp anyway, since there are so many restrictions on number of shareholders, plus the complexity of running a corporate structure. With an LLC you get the relative informality of a partnership with the liability protections of a C-Corp.
Daniel Petersen
I agree. When I organized my S-Corp in the 90s, only a few states had LLCs. Were I to start a company now, I'd definitely use an LLC.
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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:
why on earth did the list in your link have votes listed by star-sign? I mean
I saw that and thought it was a joke link at first.... It took me a while to convince myself that someone actually looks at that stuff. Sure I got a horoscope and biorhythm program on my phone, it's there along with joke of the day. :laugh: :laugh:
_________________________ John Andrew Holmes "It is well to remember that the entire universe, with one trifling exception, is composed of others." Shhhhh.... I am not really here. I am a figment of your imagination.... I am still in my cave so this must be an illusion....
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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
I think the part that rankles me the most is that the sponsor of the bill, Charlie Rangall, is one of the biggest crooks in the Congress. Oops, I forgot about that 100K of income. Tell me gentlemen, who the he$$ forgets about 100 grand?
Charlie Gilley You're going to tell me what I want to know, or I'm going to beat you to death in your own house. "Where liberty dwells, there is my country." B. Franklin, 1783
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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
We need to develop a really nasty sarcasm icon. omg - I don't want to get started.
Charlie Gilley You're going to tell me what I want to know, or I'm going to beat you to death in your own house. "Where liberty dwells, there is my country." B. Franklin, 1783
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Just reorganize as an LLC and your problem is fixed. If the bill only affects S-Corps then you are home free. LLCs can elect to be taxed as either Partnerships (Like the way S-Corps were taxed) or C-Corporations, and they can elect one time to change that taxation status. I've run several businesses and the LLC is by far the best and most flexible form of business. There really is no good reason to be an S-Corp anyway, since there are so many restrictions on number of shareholders, plus the complexity of running a corporate structure. With an LLC you get the relative informality of a partnership with the liability protections of a C-Corp.
Daniel Petersen
Pray tell, how would re-organizing as an LLC resolve the issue? The entire point of an S Corp in this context is to avoid the absurdly high SS taxes. As an S-Corp, this would save me easily 4K on the business side and 4K on my side. What did I miss?
Charlie Gilley You're going to tell me what I want to know, or I'm going to beat you to death in your own house. "Where liberty dwells, there is my country." B. Franklin, 1783
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Pray tell, how would re-organizing as an LLC resolve the issue? The entire point of an S Corp in this context is to avoid the absurdly high SS taxes. As an S-Corp, this would save me easily 4K on the business side and 4K on my side. What did I miss?
Charlie Gilley You're going to tell me what I want to know, or I'm going to beat you to death in your own house. "Where liberty dwells, there is my country." B. Franklin, 1783
I alluded to this in my posting but essentially right now an S-Corp is taxed as a partnership, which is the same way an LLC can be taxed. Avoiding the SS the way an S-Corp does started with partnerships. The only real reason for using an S-Corp vs a partnership is liability protections and the ability to issue stock (both of which an LLC gives you as well), other then that they are taxed the same (IRS Schedule K-1). The law in question only affects the taxation of S-Corps but does not change the taxation of partnerships which the LLC falls under unless the LLC elects to be taxed as a corporation. This new law is not only foolish in terms of penalizing small businesses but also for creating a new form of taxation that will cost more to enforce than it would generate in revenue.
Daniel Petersen
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I alluded to this in my posting but essentially right now an S-Corp is taxed as a partnership, which is the same way an LLC can be taxed. Avoiding the SS the way an S-Corp does started with partnerships. The only real reason for using an S-Corp vs a partnership is liability protections and the ability to issue stock (both of which an LLC gives you as well), other then that they are taxed the same (IRS Schedule K-1). The law in question only affects the taxation of S-Corps but does not change the taxation of partnerships which the LLC falls under unless the LLC elects to be taxed as a corporation. This new law is not only foolish in terms of penalizing small businesses but also for creating a new form of taxation that will cost more to enforce than it would generate in revenue.
Daniel Petersen
Daniel - I just learned something new. I was not aware that an LLC could be taxed in that manner (I had equated it in my mind to a C corp). Thanks
Charlie Gilley You're going to tell me what I want to know, or I'm going to beat you to death in your own house. "Where liberty dwells, there is my country." B. Franklin, 1783
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trollslayer - your cavalier comment about paying taxes reveals a great deal of economic ignorance. when people are taxed too much, they often shut down or move elsewhere. neither is good for the economy.
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You'll have to pay taxes? Oh heaven to Betsy!
Join the cool kids - Come fold with us[^]
Oh heaven to Betsy, some selfish person would dare to desire to not pay the bullying Federal Governement any more then they have to. All of us (except maybe you since you seem to like taxes) should frown upon any change that results in an increase in monies the Federal Governement takes from us. The power to tax is the power to destroy and politcians love both way too much.