Hi All,
I have my GC and planning to start a company for Consulting services. Apart from me, might involve few more consultants in the company to offer services to clients. Planning to pay consultants who are US Citizens and PR's thru 1099 and for H1 B Consultants thru corp-corp contract.
Based on this please advise
1. Which Business entity type will suit better?
2. How does tax paying procedures differ from S-Corp & LLC? For S-Corp,
are taxes paid every quarter?
3. Consider the example below which I got from a article:
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XXX owns a print shop. In keeping with the industry standard, XXX decides that a reasonable salary for a print shop manager is $35,000 and pays himself/herself accordingly. XXX’s total earnings for the year are $60,000: $35,000 paid in salary and the remaining $25,000 paid as a distribution from the S corp. XXX’s total employment tax is $5,355 (15.3% of $35,000).
If XXX were the owner of an LLC, he/she would have to pay employment tax on the entire $60,000, equaling $9,180. But as an S corporation, he/she realizes savings of $3,825 in employment tax.
**********************************************************
If this is true, LLC wouldn't exist. As mentioned above is it true that $ 25K (out of $ 60K) could exempted from taxes?
Please advise....Thanks!
I have my GC and planning to start a company for Consulting services. Apart from me, might involve few more consultants in the company to offer services to clients. Planning to pay consultants who are US Citizens and PR's thru 1099 and for H1 B Consultants thru corp-corp contract.
Based on this please advise
1. Which Business entity type will suit better?
2. How does tax paying procedures differ from S-Corp & LLC? For S-Corp,
are taxes paid every quarter?
3. Consider the example below which I got from a article:
**********************************************************
XXX owns a print shop. In keeping with the industry standard, XXX decides that a reasonable salary for a print shop manager is $35,000 and pays himself/herself accordingly. XXX’s total earnings for the year are $60,000: $35,000 paid in salary and the remaining $25,000 paid as a distribution from the S corp. XXX’s total employment tax is $5,355 (15.3% of $35,000).
If XXX were the owner of an LLC, he/she would have to pay employment tax on the entire $60,000, equaling $9,180. But as an S corporation, he/she realizes savings of $3,825 in employment tax.
**********************************************************
If this is true, LLC wouldn't exist. As mentioned above is it true that $ 25K (out of $ 60K) could exempted from taxes?
Please advise....Thanks!