Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-20-2012, 06:29 PM
Junior Member
 
Join Date: Feb 2012
Posts: 1
From W2 to s-corporation

Hi all,
Currently I am working on W2 and thinking about forming on S-corporation to get some tax advantages. Right now I am doing research about it and need some help with questions I have.

s-corp would be formed in California. It would be single person s-corp in the field of IT. I would be the president and employee.

Here are some reasons I am thinking about going from W2 to S-corp. Please correct me if I am missing something

1. Taking deduction portion of my house under Rent
2. Taking deduction related to travel
I understand that I can claim these deductions on W2, but 2% of my adjusted gross income would not be deducted (e.g if my total expenses are $5k and my adjusted gross income is $100k, I can deduct only $5k-2%of$100k = $3k)
3. Health insurance payment to myself
I cannot deduct this on W2 as it is less than 7.5% of my adjusted gross income, but can take this deduction on s-corp
4. Bigger tax advantages space (IRA on W2 vs profit sharing contribution and salary deferral on s-corp)
5. Unemployment benefits (I can claim them on W2 as well as on s-corp)
I would be the only member of this s-corp. president and employee. I would pay myself salary, pay unemployment insurance and can claim unemployment when I won’t have any work.

Here are my questions:
1. How does tax on s-corp work?
After taking above mentioned deductions, I would pay the rest to myself in salary. Which means my total deduction will be equal to total income for the first two sections of the form 1120s. Would s-corp owe any taxes in this situation as s-corp won’t make any profit?
2. What will be the other expenses in addition of following?
Self employment tax
Unemployment insurance



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.