Believe one who has tried it.
Virgil, Roman poet
There is no disgrace in not knowing when knowledge does not rest with you; disgrace is in being unwilling to learn
Benedetto Varchi, Italian Poet
There are many truths of which the full meaning cannot be realized until personal experience has brought it home.
John Stuart Mill, philosopher
You miss 100% of the shots you never take.
Wayne Gretzky, hockey player
Those who cannot change their minds cannot change anything.
George Bernard Shaw, Playwright
Changing your status with the IRS to be a Sub Chapter S company is the biggest tax saving you will get as a Non W2 worker, Contract/1099 worker or if you have a small business. That is why my 1st recommendation is to become a SUB CHAPTER S
It sounds mysterious or a scam, but it has been law since I became a CPA in 1978. It is designed to help Non W2 workers, Contract/1099 workers and small business.
The rules for taxation are contained in the IRS Tax Code. This is a huge book full of all the tax rules. It is divided into chapters, sub chapters and paragraph numbers, so you can find the rule you are looking for and refer to it. The rules for this type of company designation are contained in “Sub Chapter S”. All public companies and every large company use “Sub Chapter C”. This is appropriate for these large companies, but you need to become a Sub Chapter S company. Since it was designed for your type of business.
What we call the 1040 Individual Income tax form is used to account for 2 types of tax combined together. The “Income Tax” and the “Employment Tax”. W2 workers get half of their 16% employment tax paid by their employer. Non W2 workers, Contract/1099 workers and small business must pay the full 16% employment tax. This problem is solved by becoming a Sub S Corporation. It saves you employment tax and makes you more equal to W2 workers.
On average, a subchapter S will save approximately 8% of your business Sub S tax income. So, if you are a contract worker who made $50,000 for the year. You would save approximately $4,000 for being a Subchapter S Corporation.
Sub Chapter S also helps small business with one owner. If your business made net income after revenue and expense of $50,000 it would also save about 8% of the net income or $4,000.
The process is easy and is only a designation with the IRS. It does not hurt your corporate shell. Whatever you signed up as with the State when you formed your company you keep. It changes nothing with the corporate form with your State.
Unfortunately, most people and most CPAs do not understand Sub S Corporations because they spend their time with large companies that are Sub Chapter C corporations.
I will do all work required to change you into a Sub Chapter S Corporation for free.