justsomeguy
Member
What is the name of your state (only U.S. law)? CA
I'm trying to get a better understanding of the differences between the 3 simply from a tax standpoint, disregarding the liability issues.
So, let's say David has a company, he grossed $200,000 in sales in 2013. He took home $100,000 the other $100K was spent on costs for the company.
So lets look at 3 scenarios, how much would he, and the company pay?
Sole prop:
$100,000 costs, $100,000 income.
C Corp
company spends $100,000 and gives owner (CEO) $100,000
S Corp
Company Spends $100,000 and pays owner $30K, and owner takes $70K in draws.
I'm assuming;
The sole prop would owe income tax plus self employment tax on the $100K
The C Corp would owe payroll taxes on $100,000, $0 in income tax, the owner would owe income tax on the $100K
The S Corp would owe payroll taxes on $30K, $0 in income tax, the owner would owe regular income tax on $30K then would pay a lower personal income tax on the remaining $70K.
Is that about right?
I'm trying to get a better understanding of the differences between the 3 simply from a tax standpoint, disregarding the liability issues.
So, let's say David has a company, he grossed $200,000 in sales in 2013. He took home $100,000 the other $100K was spent on costs for the company.
So lets look at 3 scenarios, how much would he, and the company pay?
Sole prop:
$100,000 costs, $100,000 income.
C Corp
company spends $100,000 and gives owner (CEO) $100,000
S Corp
Company Spends $100,000 and pays owner $30K, and owner takes $70K in draws.
I'm assuming;
The sole prop would owe income tax plus self employment tax on the $100K
The C Corp would owe payroll taxes on $100,000, $0 in income tax, the owner would owe income tax on the $100K
The S Corp would owe payroll taxes on $30K, $0 in income tax, the owner would owe regular income tax on $30K then would pay a lower personal income tax on the remaining $70K.
Is that about right?