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Jan 25, 2022
2:59
:06
pm
BYUMizzou
Former User
If he's not a sub-S, then the draws are subject to self-employment taxes
So that doesn't get you anywhere.
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BYUMizzou
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Mark Harlan
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BYUMizzou
Joined
Aug 25, 2010
Last login
Apr 25, 2024
Total posts
38,157 (8,669 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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