A subchapter S corporation can save you $$$ on self employment tax

[misscrystal]

I’m starting a subchapter S corporation. It will actually be a Limited Liability Corporation which has filed with the IRS to pay tax as a subchapter S corporation.

This allows me to take a reasonable income and leave some of my fiverr earnings in the business without paying the high self employment tax rate on them. This results in a tax savings of over $5000 a year.

And my business will be buying a new house this year.

[writer99025]

Great!..

[misscrystal]

I’m paying 25% of my income in self employment taxes so this will be the answer. Now I can only pay self employment taxes on half what I earn instead of all of it.

[writer99025]

I’m paying 25% of my income in self employment taxes so this will be the answer. Now I can only pay self employment taxes on half what I earn instead of all of it.

Great idea, did an accountant suggest that, or you came up with that yourself? [i might actually write an article on this topic, I write for a US based cloud accounting company.]

[misscrystal]

Great idea, did an accountant suggest that, or you came up with that yourself? [i might actually write an article on this topic, I write for a US based cloud accounting company.]

I did some research on how to save on self employment taxes. I’m in the 25% tax bracket so it makes sense to do this. I’m going to take only enough income for myself to keep me in the 15% income bracket.

[misscrystal]

I would be helpful if I could direct some of my fiverr withdrawals to one bank account
and some of them to another one, or use a different withdrawal option. 🙂
One doesn’t want to mingle business funds with personal funds.

I’ve been looking for a house to buy but will put it in the business name.