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Employment Taxes

borodude21borodude21 subscriber Posts: 1
edited April 2007 in Grab Bag
I`m starting to make enough money in my company to pay myself (YAY, both
for my company and me!). I am setup as an S Corp, and I am the only person
in the company.

How do I pay myself? I guess from the company perspective, I`m just a
standard W-2 employee? I`m going through IRS Publication 15 now which is
supposed to answer everything -- but it`s an IRS publication (yipes).

Could someone point me in the right direction?
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Comments

  • keyconkeycon subscriber Posts: 34
    I am a Sub-S Corp, too. And a one-person operation working with several other small companies owned by individuals. All of us treat ourselves as employees. I don`t know any other way to treat it. Be sure to stay current on your tax payments. I have seen way too many small business owners go to ruin through non-payment of taxes.
    I would also hope you are considering, or already have taken steps, to funnel some of your pay into pre-tax investment vehicles. The benefits for small business owners is the main reason I went into business years ago - along with doing something I like and being my own boss. Using pre-tax money is essential in building wealth.
    The best thing I did early in my ownership career was to hire a good accountant - I suggest you do the same. Their advice is priceless, IMHO.
    Learning the financial side of your business is as important as the customer side of it. Experience shows me that many small business owners deglect this important aspect of running a business. You don`t have to be the expert - the accountant is the expert - but you should know and understand this part of the business.
    American tax laws are designed to benefit the business owners, especially small business. Why? Because small business powers America. Take advantage of everything owning a business affords you. The only way to do this is to be educated about the issues and hire good advisors.
    R@keycon2007-4-5 21:15:16
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  • keyconkeycon subscriber Posts: 34
    Scott,
    The idea is to reduce income so you pay as little taxes as possible. As a business owner, you can set up accounts for you (and other owners and your employees if you have them) where the money is put into these accounts before they show up on the bottom line ... where you pay taxes. Examples of accouonts available:
    SEP IRA - Individual 401(k) - SIMPLE IRA - 401(k) Plans - Profit Sharing & Money Sharing Plans
    I am not an accountant and I highly recommend you retain one and speak to them about the many options we all have available to us.
    I hope this helps.
    Have a great day!
    R@
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