My lease adventure

So how am I reading it wrong?

Mileage is listed at 61,239
Income is listed as 181,253.45
Expenses is listed as 168,499.68
Which leaves "income before taxes" as 12,753.77

Correct?

Ok, so if the "payroll" part is to you and only to you (which is doesnt say in there, but ok) that 26,230.80 is pretty much wiped out by the 26k you said was on a credit card not listed on the P&I, correct?

So how am I reading it wrong? So assuming that I am not in fact "reading it wrong", that leaves you making less than .21 a mile. Correct?

(Oh, and an "S" corp should NEVER make any money. The net at the end of the year should always be zero or you are paying double taxes. You will pay the taxes on the "profit" from the S corp, and you will pay them again when you take them out of the S corp unless the rules have changed since I last had an S corp 30 years ago)

 

S corp doesn’t pay taxes. Any profits pass through to the owners on a K-1 form. It is taxed the same as dividends where you pay your regular tax rate. If you were a sole proprietor you would pay social security/Medicare on that amount. He saved about 15% on that portion of income

 

Ok, so if I read THIS right (now) you did NOT have 26k on credit cards, but rather 11,400 - which would add up to 26k total between the 15.6k on the report, correct?

Which would mean your "payroll" effectively drops from 26.2k to 14.8k, yes?

And the 15.3% is Social Security/FICA tax, not "self employment". But the remaining 12.8k will be taxed at the normal rate (but not SS/FICA - at least NOT YET). It will be taxed again when you take it out of the company however.

For example, lets say you close up shop next year Jan 1. You take whatever remains of that 12.8k (after taxes) out of the business and into your personal account. Now it is income and you are taxed on that, INCLUDING the SS/FICA. See what I mean by double taxed? Before the end of the year, you want to get that amount as near zero as you can.

So in rounded numbers - and assuming you end up taking that additional 12.8 out of the business before the end of the year...
you got 14.8k+12.8k (=27.6k) / 62,000 miles for .44 cents per mile that you are paying full SS/FICA on (instead of half if you were a company driver) and zero company benefits (insurance / vacation / sick days / ect). Got to believe you would be better off part time company driver somewhere, but its your life.

God bless.

 

You are talking capital gains, and yes, thats the way it would be taxed not as personal income, but I didnt want to get too technical.

It WILL however, be taxed again in a following year as "income" when it is taken out of the companies accounts and into their personal account. And when that happens, it will be taxed again as "income". So you pay capital gains on it this year, keeping in mind at this point it is still the companies money. When the money comes out of the company and into your pocket, it is then taxed as income. Thus you are paying "double taxes" on it. Capital gains this year, and income next year (assuming you take it out of the company next year).

You always want to zero out an S corp by the end of the year.

I did the S corp thing 30 years ago, and at the end of the road it was a nightmare. Thats why now Im an LLC. You CAN run an LLC as an S corp (under certain rules), but I dont. Now they may have changed the rules and made them easier in the last 30 years. But I doubt it.

Edit: Frankly, I think the OPs income is below the min required on capital gains and actually would have zero tax on the 12.8k, but I dont want to give tax advice . But for a "normal" o-o making say 250k a year after expenses, it matters.

 

I find it interesting that you spend so much energy trying to rip apart the information he shares. Your tone isn't that of someone just trying to understand. You're determined to poop on his parade and then tell him that what he's doing and how he's doing it are wrong. Then you throw in a little "God Bless" as a closing at the end.

I'm certainly not a man of deep religious beliefs, but I'm pretty sure Christians don't piss all over people and call it sunshine! You might try a little less judgement and a little more to each his/her own.

 

Judgement? The only thing I said in any of my posts to him that is in the least bit "judgemental" was: "Got to believe you would be better off part time company driver somewhere"

That is not a judgement. That is an opinion. And I followed that opinion with: "but its your life." so it was unambiguous that it was MY OPINION.

If my son sat down and figured he would be able to buy a car in 14 days selling lemonaide at the end of the driveway would you consider it "pissing all over him" if I sat down and pointed out some things he may have over looked or wasnt figuring properly? Or would I be doing him a service?

Your opinion is your opinion. And you are entitled to it. I dont happen to agree with it.

And just because I said "God bless" doesnt mean I am a christian. You are making an assumption

 

I think you just like to argue, perhaps you were an attorney in a past life!

 

It is not taxed as Capital Gains. It is taxed at whatever your tax rate is. Could be 15% 25% 35% depending upon how much income you have. Once you pay the taxes on the money it is not taxed again when you take it out of the company. Simply put each year you submit a p&l to your accountant and he figures your taxes for that year. You could let the money accumulate in your business account for as long as you wanted and the only taxes that you would pay on that money would be on the interest earned.