Chances are, if you own a business, work as a 1099 agent, or even have a side project that's income producing, we are going to advise you to become an SCorp eventually. Here's what you need to know:
Things to Know:
-- If you have a net profit of greater than $8-10k, you will have to start paying yourself a salary. We watch for this and will advise you.
-- You will need to pay for an additional tax return, as you will now be filing a business return alongside your personal return.
-- Your business tax return deadline is now March 15 (with an extended deadline of September 15).
-- As an SCorp, you now qualify for the home business meetings deduction. You can have up to 14 in-person conferences in your home a year and receive tax deductions for it.
-- If your children perform work to assist your SCorp, there's a tax deduction for that!
Pros:
-- You will drastically save on paying self-employment taxes. (We're talking thousands).
Cons:
-- Your tax prep will increase a few hundred dollars.
-- Once you owe yourself a salary, you will now have a quarterly payroll fee.
(Still worth it for the tax savings).
