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It's obvious you don't understand how business and the economy works especially if you bought into the gov't will take care of you mentality. But the gov't doesn't produce, it takes from one to give to another and only the taker and gov't benefit, while it hurts others and it can only work for a short time and results in poverty for all except for the elite.
The point was that there is no significant growth due to tax decreases, if you have a great idea for a new business you don't wait for a tax cut. Businesses that were being taxed at a certain rate just had a decrease, that does not usually translate into growth.
Why should owners of pass through entities pay lower tax rates than wage workers or the traditionally self-employed? Is owning a pass through entity somehow contributing more to the economy dollar for dollar than working or investing in a C-corp?
No. No it is not. This was a naked giveaway to a narrow interest group that swings much more Republican than people of similar incomes who get it in other ways with little moral or practical merit.
Normally the Democrats are worse about being the vote-my-core-supporters-stuff party but the Republicans were just as bad this time around.
According to the U.S. Small Business Admin, small businesses account for 48% of national employment. In number, they represent 99.7% of all businesses in the country. In other words, it is the guy with the plumbing store or the gal with the digital online marketing agency who make up the heart and muscles of the American economy.
Business owners hardly EVER feel the gove't is on our side because we’ve got to:
1) pay license fees,
2) pay special small business taxes,
3) pay both sides of the FICA tax,
4) pay an accountant to figure out our more complicated taxes,
5) wonder why we can’t collect unemployment if our business goes under,
6) deal with employee's who think we are rolling in the money when many times we're not,
7) subsidize ridiculously high HC premiums
8) and much more
With the new tax plan, there is finally hope the gov't is now on our side.
The point was that there is no significant growth due to tax decreases, if you have a great idea for a new business you don't wait for a tax cut. Businesses that were being taxed at a certain rate just had a decrease, that does not usually translate into growth.
Of course if you have a great idea you don't wait for a tax cut to start a business LOL. It's businesses who could grow who benefit. Instead of their money being funneled to the government, that money is put to better use, re-investing it in the business to grow the business which many times result in hiring more people.
Let me ask you Goodnight... do you own and run a business? If not, how could you understand. You're allowing politicians and the media with an agenda to educate you.
For one that you mentioned so you can match their Fica tax payment you are required to get each employee's name and Social Security Number (SSN) and to enter them on Form W-2.
I wonder what they with do about the W4 since the tax code has been simplified. But before the tax change, to know how much income tax to withhold from employees' wages, you should have a Form W-4, Employee's Withholding Allowance Certificate, on file for each employee. Ask all new employees to give you a signed Form W-4 when they start work.
As an S-corp you are both the employer and employee.
Most employee's don't understand that although they are paid x amount/hr, the cost to employ them is much higher because of taxes and HC insurance. For ex.. when HC insurance premiums increase, the cost to employ each person increases. While the employee pays FICA tax of: a 6.2 percent SS tax, a 1.45 percent Medicare tax. The employer matches it.
Yet California has the highest state income tax in the nation. I don't see how you enjoy being taxed to death.
that depends on your income, if you are a millionaire then you are right..but if you earn the median income of around $50,000 California income tax is among the lowest of states that impose income tax, the effective tax rate at that income is 3.47%, in North Carolina the effective tax rate for that income would be 4.57% and in Iowa 3.95%
As far as I am aware there is no requirement to employ anyone, so it is zero to many.
That might have been the case with you, but most open an S-Corps simply because they want to be self employed.
It's obvious that since you profit is $150k (as you stated) your CPA advised you to incorporate to an s-corp for tax advantages and since you pay yourself $50k you are well under the Fica tax cap (which will be $127,200 in 2017) other wise you'd pay more taxes as a sole proprietor.
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