How do you pay yourself.

Exactly what I do.

 

Anyone out there with s Corp structure with multiple trucks/drivers?

 

I have 2 trucks, hoping to add 2 more this year.

 

My understanding of s corp was the potential to end up being taxed twice. The corporation gets taxed on profit after it pays you a salary. And you then pay tax on your salary. Thus if the corporation 100,000 and paid you a salary of 50,000, there is a net profit to the corporation of 50000 and it's taxed at the corporate which is something like 25% or higher. Then your paying taxes on your 50,000 as an individual. The corporation also paid employer fica taxes out of its 50000 profit and other expenses.

The corporation would also have to pay unemployment taxes on you to the state.
I don't have a real good understanding of it however.

 

Matt, you are not taxed twice in an S Corp. There is NO business tax on an S Corp. To use your example of 100,000 gross profit and 50,000 salary:

The 50,000 salary goes on your personal return on line 7 for Wages. Then, the company's profit of 50,000 passes through to your personal tax return via a schedule E and shows up on line 17 for S corp Profit or Loss. Line 22, Total Income, is 100,000. No different than a sole prop that made 100,000. With an S Corp, its ALL taxed at your personal rate ON your personal return. The only difference is that the 100,000 is broken up on 2 different lines, your salary on one line (7) and your remaining profit on another line (17) but it totals the same 100,000 as it would've had you been a sole prop on line 22.

As far as FICA goes, on a 50,000 salary, it would be $7650 (15.3%) Total paid to the government. That's $3,825 (7.65%) paid by the employee through withholding on their W2 and $3,825 (7.65%) paid by the employer, which is still you obviously. The remaining 50,000 company profit is yours FICA free. FICA is only paid on salary, not profit, in an S Corp. Correct me if I'm wrong, because I've never been a sole prop before to know, but doesn't a sole prop pay the 15.3% on their full 100,000 as a self employment tax, which would be $15,300 in this scenario. So, you've just saved yourself $7650 by being an S Corp. But, why claim a 50,000 salary? You can just as easily claim a 36,000 salary with a 64,000 company profit. That way you are only paying $5500 to FICA, saving yourself even more money. Your salary only has to be fair and reasonable to the eyes of the government, you can make it whatever number you want. I made mine 36,000 out of ease. I pay myself 3,000 once a month as salary. I take a draw on the rest of the company profit whenever I need to.

The S Corp does have to pay unemployment taxes to the state for the employee. In my state, it's 3.8% on the first 9,000 of salary paid to the employee. So that's $342 dollars...

 

NEED HELP!! ...phone# & name of cpa ??? HELP.

 

@InmanFreight the 15,300 figure is what my old has owed to uncle Sam the past two years. Gross revenue of 300,000+ every year. Was over 400k when we ran like maniacs. Technically no salary. Just has an account and takes whenever he wants.
Been stressing to him to incorporate but is stubborn and it costs him. Then curses uncle Sam out.
Au vey

 

I agree! My wife and I run team and taxes, especially the self employment tax, was killing us! Since we have incorporated We haven't owed anything in taxes and we are even getting money back on our personal returns every year.

 

One thing I agree with you on. My money is mine what there is of it. I've never paid any quarterly payments just all by the 15th till last year.
Had to setup payments. IRS man on phone said: "you want me to tell you how to avoid this?" I told him yeah, close my bank accounts , go back to working on trucks and cars CASH ONLY. In trucking your personal identifier is attached to everything.

 

Tax problems are all too common with 1099'ed sole proprietors and guys who lease on under another companies authority.

That's one thing I don't mess with anymore. I pay myself a modest salary plus perdiem through the S corp and pay my payroll tax liability every month.

When I get close to the end of the year I know what kind of money is in the business that will be taxed and I start prepaying stuff up for the next year, put money in ROTH IRA, etc, to minimize the tax liability.