Alabama Partnership/Corporate Shell

[lupo]

State: Alabama

I am forming a company with 2 friends. We are interested in keeping payroll flexible and if possible, avoiding it. One idea we had to completley avoid payroll, was creating a partnership between 3 corporations. One held by each of us. We could then - when the time arose, write checks from the partnership to the corporations for "services rendered" by each of us. We could each manage our own corporation and pay any profits to ourselves as dividends.

Is this possible? If not any ideas? Thanks!

 

[clueless3]

Simple answer: If you ever want to deduct costs of TRAVEL and MEALS, you CANNOT avoid paying payroll taxes and such. Period. However, if you DON'T deduct those costs, then yes, you CAN avoid payroll.

Reason: Companies do NOT pay CONTRACTORS for their costs of their own travel and meals. Companies DO pay their own EMPLOYEES costs of their travel and meals.

So: Do you want to be EMPLOYEE of your own company? or do you want to be the CONTRACTOR for your company? Your choice.

Imaging telling the IRS: "Um... This is our corporation, but it does NOT have ANY employee!! It only has CONTRACTORS!! A corporation, but NO employee whatsoever! So we DON'T PAY payroll taxes. HOWEVER, we DO deduct cost of travel and meals for those CONTRACTORS!!"

Would it fly??