New 2018 Tax code, S-Corp questions...

Yeah my accountant for the last 20 years died recently , I'm not sure who is taking over his clients it's kind of in limbo , might be shopping a new trucking accountant

 

Right - as a current ‘S’ Corp, we may be better to change our election to a ‘C’ Corp, but I learned this can only be done after 3 ( or 5? ) years in either particular status.

We also skip the home office deduction - the office is only 5% of the homes square footage anyway , but we do deduct a 50 by 60 shop that houses the truck and supplies - power , rent (from ourselves), and % of insurance.

10-4 to keeping more scheckels!!

 

I think you are mis-calculating this. Profit is the business NET, that is AFTER you've been paid a competitive wage. So if you NET 100K, you have to pay yourself at least 50K, which, with payroll taxes and such, costs 60K. That leaves 40K in "profit" to distribute. Then the deduction is limited to 50% of your w-2 wage, or 50% of the 50K you took as a salary. That's 25K. So the deduction amounts to your tax rate (25%) of 20% of 25K. So it's 25% of $5,000 plus (your state tax rate * $5,000). About $1,250. Now, if you give me a check for $1,250, i'm going to cash it, but it seems to be much ado about nothing.......

We'll have to simply calculate it out "both ways" and see what is best. Remember, you can get the deduction if you are a sole proprietor, too.

Per diem (Meals and Incidental expenses) are unchanged, as far as I can see. For our company, it doesn't matter, because we pay actual per diem to the drivers off their pay tickets, so they already get it. With the new higher standard deductions, many drivers will not get any benefit from the per diem structure, unless they get it taken out of their checks.

The main point (other than the "big whoop" realization above) is that is doesn't matter to me. I don't have a mortgage, no student loans, no kids in college, etc, so I don't have much in the way of deductions. This deduction is not big enough to hit the threshold. Another "big whoop" realization.

 

Hey did you get answer about if you file scorp status and become an employee can you file perdiem

 

I've done it the way the op describes since day 1. Keep the corporate business expenses and personal separate. Pay myself a weekly salary, file quarterly payroll taxes through my payroll service. File my annual corporate tax return every year by march.