How to Save $$$ in Tax Dollars by Forming an S Corp

How to Save $$$ in Tax Dollars by Forming an S Corp - https://fundbox.com Avatar Posted by Caron_Beesley under Management
From https://fundbox.com 2114 days ago
Made Hot by: steefen on November 3, 2016 12:15 pm
Why should you form an S Corp? Over 70% of U.S. businesses are operated as sole proprietorships—and it’s no surprise. Sole proprietorships are the easiest business structure to form and operate. That’s all great, but if you’re a sole proprietor, your tax obligation can be a significant burden.

To start with, sole proprietors are responsible for paying 100% of their self-employment taxes to cover Social Security and Medicare. If you were working for someone else, you’d only be responsible for half of those expenses, as your employer pays the rest. Essentially, you’re paying both personal and business tax on every dollar you earn.

Another tax disadvantage for sole proprietors is that they are taxed on all profits of the business, less any deductible expenses.

Compare this scenario with another increasingly popular business structure—the S Corporation.





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Share your small business tips with the community!
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Share your small business tips with the community!