Msg#: 4642209 posted 4:24 pm on Feb 4, 2014 (gmt 0)
Set up an S corp and you won't receive one. Saves on taxes.
Not necessarily. As in all things tax related- your mileage may vary.
In California, corps (including S corps & LLCs) are subject to a minimum $800 franchise tax annually. Even if your business has a loss, you still have to pay the $800. (And if you decide to close your business and forget to file the paperwork before the end of the year, you'll have to pay the $800 tax each year until you file to close it. Even if you file on Jan. 2.)
Msg#: 4642209 posted 12:47 am on Feb 5, 2014 (gmt 0)
Re: S corp, yes, then it might not worth setting up one in CA. In CO, I pay fed and state tax on all of my profits, but I only pay FICA taxes on what I pay myself as a salary (which has to be reasonable). So a significant amount of income is not subject to FICA tax. On Schedule C, it is all subject to the 15.3% tax. BTW, I am not an accountant.