I should mention one qualifier though

Jan 25, 2022
3:22:58pm

BYUMizzou Former User

You have to be organized/incorporated to make an S election. If you're an unorganized entity (sole proprietorship) it's not an option.

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BYUMizzou

Previous username: Mark Harlan
Bio page: BYUMizzou
Joined: Aug 25, 2010
Last login: May 22, 2024
Total posts: 38,330 (8,691 FO)

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Messages

Author

Time

Question for you small business owners

Beggar

1/25/22 2:52pm

Needs to be an S Corp to make a difference. Pay her a reasonable salary and the

JAGA97

1/25/22 2:56pm

This is the correct answer

Jersey hunter

1/25/22 3:03pm

Well...that depends.

Plato

1/25/22 3:19pm

Keep it as low as can be justified as reasonable and take the rest as draws so

marinercoug

1/25/22 2:57pm

If he's not a sub-S, then the draws are subject to self-employment taxes

BYUMizzou

1/25/22 2:59pm

I am assuming is is an S-Corp or has elected to be taxed as an S-Corp since he

marinercoug

1/25/22 3:57pm

It depends on how you are organized. Do you have an S-election?

BYUMizzou

1/25/22 2:58pm

I have always wonder if you can switch to this later? Currently we have a side

AggieWeekendCougar

1/25/22 3:10pm

Yes, you can. You can make an S-election at any point. It needs to be done by

BYUMizzou

1/25/22 3:20pm

I should mention one qualifier though

BYUMizzou

1/25/22 3:22pm

Do you have kids? First step is to employ the kids in the business, as they

SanFran

1/25/22 3:15pm

In addition to the tax considerations mentioned, you have a capital allocation

NOCAL_YFAN

1/25/22 3:16pm

In any case consider retirement plan options to keep taxes down. Depending

byu78

1/25/22 3:38pm

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