Fill Form 843 Pub 2024-2025

My people, my people, how's it going? So today is going to be a fairly quick and easy one. This is concerning S corporations, also known as small business corporations or small corporations. The S Corp is a great tool for 1099 employees or self-employed individuals. If your profit is expected to be more than ten thousand dollars in the next couple of years, I seriously suggest creating an S Corp. Let me explain why. Normally, if you file a regular 1040 Schedule C with ten thousand dollars in profit, you would pay fifteen point three percent of that in self-employment tax. However, with an S Corp, your self-employment tax can be cut in half. Here's how it works. Let's say your profit is ten thousand dollars. Instead of paying self-employment tax on the full ten thousand dollars, you can pay yourself five thousand dollars in salary and pay the payroll tax or self-employment tax on that amount. The remaining five thousand dollars will be given to you as a distribution, which will be taxed at regular income tax rates, not self-employment tax rates. In addition, I previously mentioned the benefits of 197 amortization. This can be done on any return, but it is better to do it on a corporation or partnership return. The reason for this is that in order to claim the 197 amortization, you must show that the assets have changed hands from personal to business. This is difficult to prove on a Schedule C return because the Schedule C is considered a unified entity. However, once you incorporate and have an S Corp, it becomes a separate legal entity, allowing you to show that the assets have changed hands from the individual to the corporation. Another advantage of having an S corporation is that you become eligible for...