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Old 01-04-2018, 09:06 AM
 
262 posts, read 188,764 times
Reputation: 274

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Quote:
Originally Posted by Finn_Jarber View Post
It is a small business, an S-Corp. I am sorry if it offends you when I call it what it is. What tax Obama increase are you talking about? I have been doing what I do for some time, and have not been hurt by any "Obama tax increase". What are you talking about? If there was a tax hike, it did nor affect businesses like mine. How $8K? Trump-Tax will force active S-Corps to take 70% of their income as salary, which is subject to 15% pay-roll tax. If your income is $150K, and took $50K as salary in 2017, your payroll tax would have been $7.5K. With Trump Tax you are forced to take $105 as salary, and the tax will be about $8K more. So, we will be forced to pay massive additional pay-roll taxes while listening to GOP brag about how they are going to cut Social Security. Pay more for less. What a great idea
Have you talked to a CPA? I was talking to a couple over the holidays and they were saying they may be pushing several of their clients to incorporate as LLCs depending on their situation. I'm obviously not an expert but it sounds like that may help you.
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Old 01-04-2018, 09:23 AM
 
Location: Florida
62,647 posts, read 34,149,323 times
Reputation: 10400
Quote:
Originally Posted by Kramer68 View Post
Have you talked to a CPA? I was talking to a couple over the holidays and they were saying they may be pushing several of their clients to incorporate as LLCs depending on their situation. I'm obviously not an expert but it sounds like that may help you.
I have asked, and he is still trying to figure out the new law. It is convoluted for S-Corps, so if I am lucky there is some loophole I can take to minimize the damage.
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Old 01-04-2018, 09:27 AM
 
39,130 posts, read 20,252,823 times
Reputation: 12678
Quote:
Originally Posted by Finn_Jarber View Post
It is a small business, an S-Corp. I am sorry if it offends you when I call it what it is. What tax Obama increase are you talking about? I have been doing what I do for some time, and have not been hurt by any "Obama tax increase". What are you talking about? If there was a tax hike, it did nor affect businesses like mine. How $8K? Trump-Tax will force active S-Corps to take 70% of their income as salary, which is subject to 15% pay-roll tax. If your income is $150K, and took $50K as salary in 2017, your payroll tax would have been $7.5K. With Trump Tax you are forced to take $105 as salary, and the tax will be about $8K more. So, we will be forced to pay massive additional pay-roll taxes while listening to GOP brag about how they are going to cut Social Security. Pay more for less. What a great idea
Oh so you incorporated so you can reduce your Fica Tax.

As an owner of an S-corp you, the owner must pay yourself what is considered normal for your job description and for a profit of $150k and paying yourself $50k is really low for an owner allowing you to avoid paying the correct amount in Fica taxes and you better hope the IRS doesn't question you asking where you came up with paying yourself $50k.

So the tax law now forces you to pay yourself the income you should be paid. And since with an S-corp your profit is taxed at a personal tax rate, but with Trumps tax plan profit will be taxed at 25% instead of your personal tax rate.

Last edited by petch751; 01-04-2018 at 09:37 AM..
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Old 01-04-2018, 09:34 AM
 
39,130 posts, read 20,252,823 times
Reputation: 12678
Quote:
Originally Posted by Finn_Jarber View Post
It is a small business, an S-Corp. I am sorry if it offends you when I call it what it is. What tax Obama increase are you talking about? I have been doing what I do for some time, and have not been hurt by any "Obama tax increase". What are you talking about? If there was a tax hike, it did nor affect businesses like mine. How $8K? Trump-Tax will force active S-Corps to take 70% of their income as salary, which is subject to 15% pay-roll tax. If your income is $150K, and took $50K as salary in 2017, your payroll tax would have been $7.5K. With Trump Tax you are forced to take $105 as salary, and the tax will be about $8K more. So, we will be forced to pay massive additional pay-roll taxes while listening to GOP brag about how they are going to cut Social Security. Pay more for less. What a great idea
So Trumps plan makes sure people don't abuse the reduction of business taxes by paying yourself too little so you can pay less taxes on profit and pay less in FICA taxes.

Democrats were complaining about the cap on income subject to the 12.4% Social Security portion of FICA wages anyway. Although the cap hasn't changed, it makes business owners pay themselves what they should be paying. Loophole closed.

Last edited by petch751; 01-04-2018 at 09:46 AM..
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Old 01-04-2018, 09:39 AM
 
39,130 posts, read 20,252,823 times
Reputation: 12678
Quote:
Originally Posted by Finn_Jarber View Post
I have asked, and he is still trying to figure out the new law. It is convoluted for S-Corps, so if I am lucky there is some loophole I can take to minimize the damage.
The 72,000 page tax law has always been convoluted (and knowing people don't understand the tax code it's easier for politicians and the media to lie, and the reason why we should never let politicians or the media educate us on taxes.

And a limited liability company (LLC) is a corporate structure whereby the members of the company cannot be held personally liable for the company's debts or liabilities.

Last edited by petch751; 01-04-2018 at 09:51 AM..
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Old 01-04-2018, 09:46 AM
 
Location: Florida
62,647 posts, read 34,149,323 times
Reputation: 10400
Quote:
Originally Posted by petch751 View Post
Oh so you incorporated so you can reduce your Fica Tax.

As an owner of an S-corp you, the owner must pay yourself what is considered normal for your job description and for a profit of $150k and paying yourself $50k is really low for an owner allowing you to avoid paying the correct amount in Fica taxes and you better hope the IRS doesn't question you asking where you came up with paying yourself $50k.

So the tax law now forces you to pay yourself the income you should be paid. And since with an S-corp your profit is taxed at a personal tax rate, but with Trumps tax plan profit will be taxed at 25% instead of your personal tax rate.
I have been paying the correct amount, and what my CPA has recommended. Trump-Tax is a massive tax hike.
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Old 01-04-2018, 09:50 AM
 
Location: Florida
62,647 posts, read 34,149,323 times
Reputation: 10400
Quote:
Originally Posted by petch751 View Post
The 72,000 page tax law has always been convoluted
It should be obvious I am referring to Trump-Tax.
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Old 01-04-2018, 09:52 AM
 
39,130 posts, read 20,252,823 times
Reputation: 12678
Quote:
Originally Posted by Finn_Jarber View Post
I have been paying the correct amount, and what my CPA has recommended. Trump-Tax is a massive tax hike.
Well if the IRS comes calling you better have a better answer than that.
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Old 01-04-2018, 09:53 AM
 
39,130 posts, read 20,252,823 times
Reputation: 12678
Quote:
Originally Posted by Finn_Jarber View Post
It should be obvious I am referring to Trump-Tax.
The 72,000 page tax law has always been convoluted. If you made more money you would know the convoluted mess Obama added to it.
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Old 01-04-2018, 09:55 AM
 
Location: Western PA
3,575 posts, read 4,914,292 times
Reputation: 2813
It's so nice that the wealthy got $1 trillion from us. It's the largest transfer of wealth in history, but at least it didn't go from the rich to the poor. That would have been socialism.
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