A big damn check...
35k in Federal tax and estimates of 250-500k income?
**** US taxes are cheap.
Fed tax here is:
15% on the first $40,970 of taxable income, +
22% on the next $40,971 of taxable income (on the portion of taxable income between $40,970 and $81,941), +
26% on the next $45,080 of taxable income (on the portion of taxable income between $81,941 and $127,021), +
29% of taxable income over $127,021.
Provincial:
Ontario 5.05% on the first $37,106 of taxable income, +
9.15% on the next $37,108, +
11.16% on the amount over $74,214
That is JUST income tax.
**** US taxes are cheap.
Fed tax here is:
15% on the first $40,970 of taxable income, +
22% on the next $40,971 of taxable income (on the portion of taxable income between $40,970 and $81,941), +
26% on the next $45,080 of taxable income (on the portion of taxable income between $81,941 and $127,021), +
29% of taxable income over $127,021.
Provincial:
Ontario 5.05% on the first $37,106 of taxable income, +
9.15% on the next $37,108, +
11.16% on the amount over $74,214
That is JUST income tax.
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Joe, is it likely that you are going to get spanked with penalties? They usually frown on that large of an amount owed. They will definitely want better quarterlies next year.
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It doesn't matter if he is an LLC or not. He will have to pay both parts of the SS tax either way. Either he is self employed and pays both parts, or he works for his own company and he pays half and his company pays half. At the end of the day he's still paying for it. There is no way to magically not have to pay the full SS tax.
Although, as an S-Corp I believe you can pay yourself less of a regular wage and get dividends that you only have to pay income tax on and not SS. But the regular wage has to be "fair". As in if the IRS sees you file only say 30k regular and you got dividends of like 60k. They might send an auditor to visit you.
Although, as an S-Corp I believe you can pay yourself less of a regular wage and get dividends that you only have to pay income tax on and not SS. But the regular wage has to be "fair". As in if the IRS sees you file only say 30k regular and you got dividends of like 60k. They might send an auditor to visit you.
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Five years ago, I converted over to S-Corp, and I find that it is easier to juggle the tax burden that way. I pay myself a paycheck, and taxes are paid with no worries if I will be able to cough it up at the end of the year.
Since I am the one writing the checks, it is easy to monitor how much I am paying in withholding. If business is good, and I would like to take in more money, I use the (Circular E), Employer's Tax Guide to make sure that I am sending in the right amount of withholding. I try to pay in just enough that I get a small refund at the end of tax season. That little check puts a smile on my face.
Since I am the one writing the checks, it is easy to monitor how much I am paying in withholding. If business is good, and I would like to take in more money, I use the (Circular E), Employer's Tax Guide to make sure that I am sending in the right amount of withholding. I try to pay in just enough that I get a small refund at the end of tax season. That little check puts a smile on my face.
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Thread Starter
Joined: Sep 2005
Posts: 34,402
Total Cats: 7,523
From: Chicago. (The less-murder part.)
See post 17.
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By ******* criminals I mean our government, politicians. Republican and Democrats are equally crooked.
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If you were close I'd offer you a few beers and maybe even free hand with your car or other project. I really respect people in the Armed Forces and appreciate their services helping to keep us free. What I don't appreciate is the constant attempts by the Government to legislate away what you fight to protect.
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Actually I'm okay with that. The paying for you going thing, not really Afghanistan though..
If you were close I'd offer you a few beers and maybe even free hand with your car or other project. I really respect people in the Armed Forces and appreciate their services helping to keep us free. What I don't appreciate is the constant attempts by the Government to legislate away what you fight to protect.
If you were close I'd offer you a few beers and maybe even free hand with your car or other project. I really respect people in the Armed Forces and appreciate their services helping to keep us free. What I don't appreciate is the constant attempts by the Government to legislate away what you fight to protect.
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