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Question about setting up an s corp and employees / independent contractors

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musicsurf

Junior Member
What is the name of your state (only U.S. law)? Florida

I am reaching out to all of those who's knowledge on the subject of law far outweighs mine. I have recently dissolved my sole prop to become and officer in an s corp. I am one of two vp's and the only other person in the president. We all hold 1/3 of the corp. We are trying to find out how to consider ourselves for tax purposes, as employees or independent contractors. One of the issues we are faced with is that we are located in Florida and the other Vice President is located in GA. If he were considered an employee we would need to set up with GA to pay state income tax, and as far as I can tell if he were considered an independent contractor we wouldn't. My main question is, is this even legal? Can an officer of a corp be considered an independent contractor to it? If not is there any easy way to handle the situation regarding taxes with GA? Any help would be appreciated. Thank you.What is the name of your state (only U.S. law)?
 


HomeGuru

Senior Member
What is the name of your state (only U.S. law)? Florida

I am reaching out to all of those who's knowledge on the subject of law far outweighs mine. I have recently dissolved my sole prop to become and officer in an s corp. I am one of two vp's and the only other person in the president. We all hold 1/3 of the corp. We are trying to find out how to consider ourselves for tax purposes, as employees or independent contractors. One of the issues we are faced with is that we are located in Florida and the other Vice President is located in GA. If he were considered an employee we would need to set up with GA to pay state income tax, and as far as I can tell if he were considered an independent contractor we wouldn't. My main question is, is this even legal? Can an officer of a corp be considered an independent contractor to it? If not is there any easy way to handle the situation regarding taxes with GA? Any help would be appreciated. Thank you.What is the name of your state (only U.S. law)?
**A: it is possible but we don't know all the details. Therefore it is best that you seek counsel from a CPA.
 

LdiJ

Senior Member
What is the name of your state (only U.S. law)? Florida

I am reaching out to all of those who's knowledge on the subject of law far outweighs mine. I have recently dissolved my sole prop to become and officer in an s corp. I am one of two vp's and the only other person in the president. We all hold 1/3 of the corp. We are trying to find out how to consider ourselves for tax purposes, as employees or independent contractors. One of the issues we are faced with is that we are located in Florida and the other Vice President is located in GA. If he were considered an employee we would need to set up with GA to pay state income tax, and as far as I can tell if he were considered an independent contractor we wouldn't. My main question is, is this even legal? Can an officer of a corp be considered an independent contractor to it? If not is there any easy way to handle the situation regarding taxes with GA? Any help would be appreciated. Thank you.What is the name of your state (only U.S. law)?
All working shareholders must be employees of the corporation and receive a reasonable wage (with proper withholding) for the work that they perform for the corporation. Anything else would get you into hot water with the IRS. So...the corporation is going to have to get set up to withhold GA state taxes. Use a payroll service, they can handle it the most efficiently and economically.
 

davew128

Senior Member
All working shareholders must be employees of the corporation and receive a reasonable wage (with proper withholding) for the work that they perform for the corporation. Anything else would get you into hot water with the IRS.
Well, lets be clear. Being an officer makes someone a statutory employee. In and of itself it does not lend to being required to draw salary, and presumably anything paid would be nominal. Performing services will require a salasry, but not just holding corporate office.
 

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