Question about s-corp
 

I am aware that you get some tax advantages this way and that you are able to pay yourself a salary etc but won't it be a disadvantage if you pay yourself out a lower salary in case you want to apply for a high credit line etc?

Supposedly it's better to pay yourself out a lower salary so you save more on taxes but what if you want to make a major purchase/ get a high credit line?

have you spoke to a cpa?

Every corp type has a best fit for each person and situation. You really need proper advice from an accountant who knows your personal numbers and what is best for you.

Your portion of the profit (or loss) the scorp makes will also show as your income. (in addition to your salary)

The corp can always make the purchase or you can take a shareholder distribution for what you need.

dam.....I'll need u to refer me to your accountant, I'll be doing lots of changes (accounting-wise) in the next 3 months or so cause this year I was tax-raped. Do you use an accountant in Hollywood or surrounding areas?

Consider it an expensive wake-up call - the year I had to pay more than 80K to the feds (my first real year in the biz) was the year I found a lawyer and an accountant who could set up a corporate structure that would not only minimize taxes, but set up the right kind of retirement and investment vehicles that will hopefully keep me from having to wear a baseball cap and bag groceries when I retire :1orglaugh

I agree you need to consult and attorney. Ask about forming an LLC. This will probably do what you need at a far lower cost.

100% of the s-corps profits or losses get passed through to the owners of the s-corps stock. While still "income", you'll save the Social security, medicare etc on the portion that you take as a distribution.

Call a cpa. While there are benifits to an S-corp vs an LLC, an s-corp requires far more paperwork (keeping of minutes, the taxes need to be paid on the salry you takes etc)

:thumbsup

I need a drink.

paperwork for your lawyer or accountant sure. I get charged just the same if it were a s-corp or llc. My meeting is telling my lawyer that nothing has chanced and off my paperwork goes to the state etc.

what he said...
the reason S-corp owners pay themselves a salary is because so many real estate agents for years did not (and didnt pay social security taxes), the IRS got on their case and now is better to pay yourself a small salary and pay employer ss taxes on that income and not on the entire s corp income.
in a c corp you can leave the money in the corp and only take out what you want, but you would pay tax twice, first the c corp would pay tax on its profit, then whatever dividend you give yourself, you'd be paying income tax.. good for uncle sam !
as i understand LLC are better for "investment partnerships" or shorter termed ventures..
dont go cheap, get real advise from a CPA.

More paperwork? That's what the lawyer and accountant are for.

As already mentioned, everybody's personal situation is different so it would be best to speak with somebody well versed in these types of things. A good accountant is worth every penny.