But there is no facility to pay the 15% if your a subcontractor. See Line 27 on 1040. They give you back a credit for 1/2 of the 15% so you only pay 7.5%. I'm not trying to get out of anything, just noting that there is no way to pay it entirely IF youre a subcontractor.
On Wed, Jun 9, 2010 at 1:01 AM, David Sovereen <david.sover...@mercury.net> wrote: > If you are a subcontractor, you pay the entire 15% yourself. Subcontracting > does not eliminate or reduce any social security tax obligation. It only > alters who pays it. > > Dave > > RickG <rgunder...@gmail.com> wrote: > > > If I understand correctly, social security tax is 15%. In an > employment situation, an employee pays 7.5% and the employer matches > pays the other 7.5%. If you subcontract, you only pay 7.5% and the > corp pays nothing. > > On Tue, Jun 8, 2010 at 11:27 PM, Scottie Arnett <sarn...@info-ed.com> wrote: >> The 7.5% comes back in on self-employment tax. That is the social security >> tax on the self-employed. >> >> Scottie >> >>> But, they're not getting unemployment taxes, and they loose 7.5% on >>> social security taxes... >>> >>> On Tue, Jun 8, 2010 at 12:29 PM, Jerry Richardson >>> <jrichard...@aircloud.com> wrote: >>>> Yeah but they get it through self employment taxes. >>>> >>>> -----Original Message----- >>>> From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On >>>> Behalf Of RickG >>>> Sent: Tuesday, June 08, 2010 8:03 AM >>>> To: WISPA General List >>>> Subject: Re: [WISPA] legal entity type - was taxes >>>> >>>> Tom, >>>> >>>> I wanted to reply to this before I sent my last remarks. Rather than >>>> employee, I've been a "subcontractor" to my corporation since it >>>> began. These CPAs say that since I work in the company this is not a >>>> good thing because the government doesnt get all its "due" through >>>> payroll taxes. >>>> >>>> On Tue, Jun 8, 2010 at 12:56 AM, Tom DeReggi <wirelessn...@rapiddsl.net> >>>> wrote: >>>>>> Same subject, different question: Are you an employee of the corp? >>>>> >>>>> Good question. Again that depends. Depends on whether you are making >>>>> money >>>>> or investing in money. >>>>> If you invest cash into a company, it usually makes sense to remove >>>>> cash by >>>>> paying back the investment, to avoid being double taxed on your own >>>>> money, >>>>> which would occur if you took payroll instead. If you are the sole >>>>> owner of >>>>> a S-Corp it becomes more forgiving, because at the end of the day >>>>> anything >>>>> you didn't take as salary, would tunnel to your personal income return >>>>> anyways. >>>>> But its really about what your tax braket and tax rate is for each >>>>> entity, >>>>> and monthly estimated tax payments would be. It about adjusting it so >>>>> the >>>>> least amount of tax paid upfront. >>>>> If you haven't injected investment into the company, and company is >>>>> making >>>>> money, and you need money monthly to live, you may have no choice but >>>>> to >>>>> take payroll as an employee, so you can take money out when you need >>>>> it, >>>>> which is every month. Where as, if you live off another income source, >>>>> you >>>>> may not need to be an employee, and just take the income at end of the >>>>> company tax year. It becomes mor complicated if multiple stock holders, >>>>> as >>>>> Employee payroll can be a method of defining fair compensation for time >>>>> spent, before recognizing company profits. >>>>> I personally am not an employee of my company, I am a stockholder. It >>>>> much >>>>> cleaner that way for my situation. >>>>> However, I warn caution to others on that. If you anticipate needing >>>>> credit >>>>> for anything, so many credit things require proof of current historical >>>>> monthly income. >>>>> >>>>> Tom DeReggi >>>>> RapidDSL & Wireless, Inc >>>>> IntAirNet- Fixed Wireless Broadband >>>>> >>>>> >>>>> ----- Original Message ----- >>>>> From: "RickG" <rgunder...@gmail.com> >>>>> To: "WISPA General List" <wireless@wispa.org> >>>>> Sent: Monday, June 07, 2010 11:04 PM >>>>> Subject: Re: [WISPA] legal entity type - was taxes >>>>> >>>>> >>>>> Same subject, different question: Are you an employee of the corp? >>>>> >>>>> On Mon, Jun 7, 2010 at 1:55 PM, Travis Johnson <t...@ida.net> wrote: >>>>>> We are an S-corp and have been since the first day we started. It >>>>>> provides personal protection against people suing you, etc. It also >>>>>> allows expenses by the corporation that may or may not be allowed as a >>>>>> sole proprietor (additional office locations, etc.). >>>>>> >>>>>> Again, you would need to check with your accountant. They are the only >>>>>> ones that can give you exact information. >>>>>> >>>>>> Travis >>>>>> Microserv >>>>>> >>>>>> RickG wrote: >>>>>>> Its tempting to use a known CPA that is versed in our industry but >>>>>>> I've had issues dealing with those out of state. With that said, I'm >>>>>>> curious as to feedback on another issue. Who here is doing business >>>>>>> as >>>>>>> a "sole proprietor"? I've been an "S-Corp" for years but considering >>>>>>> switching back due to its simplicity. This Corp stuff doesnt seem >>>>>>> worth all the hassle. >>>>>>> Thanks! >>>>>>> >>>>>>> On Fri, Jun 4, 2010 at 12:05 PM, Marlon K. Schafer >>>>>>> <o...@odessaoffice.com> >>>>>>> wrote: >>>>>>> >>>>>>>> I'm with Travis on this one. Sometimes we take the entire hit at >>>>>>>> once, >>>>>>>> other times we spread it out. It kind of depends on what we need for >>>>>>>> deductions and what the equipment is. >>>>>>>> >>>>>>>> Our accountant has taken a lot of time to learn this industry and is >>>>>>>> really >>>>>>>> good. The phone number is 509.982.2922 if anyone is looking for a >>>>>>>> good >>>>>>>> one. >>>>>>>> >>>>>>>> laters, >>>>>>>> marlon >>>>>>>> >>>>>>>> ----- Original Message ----- >>>>>>>> From: "RickG" <rgunder...@gmail.com> >>>>>>>> To: "WISPA General List" <wireless@wispa.org> >>>>>>>> Sent: Thursday, June 03, 2010 11:55 AM >>>>>>>> Subject: Re: [WISPA] taxes >>>>>>>> >>>>>>>> >>>>>>>> >>>>>>>>> Travis, thanks for your input. I'm really looking for feedback as >>>>>>>>> to >>>>>>>>> what our industry's standard is. I submit that the IRS does not >>>>>>>>> look >>>>>>>>> at it as a "personal, business choice". I'd rather do it correctly >>>>>>>>> now >>>>>>>>> than find out from the IRS I'm doing it wrong. >>>>>>>>> >>>>>>>>> On Thu, Jun 3, 2010 at 12:44 PM, Travis Johnson <t...@ida.net> >>>>>>>>> wrote: >>>>>>>>> >>>>>>>>>> This is a personal, business choice. There is no set answer. Some >>>>>>>>>> of >>>>>>>>>> our >>>>>>>>>> equipment we expense and some we depreciate. It all depends on >>>>>>>>>> what >>>>>>>>>> tax >>>>>>>>>> breaks you need now vs. later. >>>>>>>>>> >>>>>>>>>> Travis >>>>>>>>>> Microserv >>>>>>>>>> >>>>>>>>>> >>>>>>>>>> RickG wrote: >>>>>>>>>> >>>>>>>>>>> Everyone's favorite subject :) >>>>>>>>>>> >>>>>>>>>>> I'm getting mixed information form my accountants on this and >>>>>>>>>>> want to >>>>>>>>>>> know what everyone else is doing. The basic question is this: Are >>>>>>>>>>> you >>>>>>>>>>> expensing or depreciating the equipment? Equipment being radios >>>>>>>>>>> (AP & >>>>>>>>>>> CPE), antennas, switches, firewalls, etc. >>>>>>>>>>> With the cost of the electronics being so low, its not making >>>>>>>>>>> much >>>>>>>>>>> sense to depreciate. Which takes me to a second question: Have >>>>>>>>>>> any >>>>>>>>>>> WISPs been audited by the IRS for this reason? >>>>>>>>>>> >>>>>>>>>>> Thanks in advance! -RickG >>>>>>>>>>> >>>>>>>>>>> >>>>>>>>>>> -------------------------------------------------------------------------------- >>>>>>>>>>> WISPA Wants You! 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