How can I maximize my net income (after taxes) with my Georgia LLC (S-Corp)?

[zzezzezz]

I recently created a Georgia LLC that will be treated (taxed) as an S-Corp. I will begin a contracting job soon (Software Engineer) and will be paid corp-to-corp at $115/hr. I am expecting $220,800 gross income.

I have several questions in order to maximize my net income after State and Federal taxes:
1) What should I be keeping track of for deductions? (phone/internet bill, car mileage, health insurance, etc.)
2) How can I take full advantage of my LLC/S-Corp?
3) How much should I pay myself?
4) How much should I pay every quarter in State and Federal taxes? (If possible, I would like to hit the number as close as possible, accounting for all my deductions, without going over/under)

 

[Zigner]

I recently created a Georgia LLC that will be treated (taxed) as an S-Corp. I will begin a contracting job soon (Software Engineer) and will be paid corp-to-corp at $115/hr. I am expecting $220,800 gross income.

I have several questions in order to maximize my net income after State and Federal taxes:
1) What should I be keeping track of for deductions? (phone/internet bill, car mileage, health insurance, etc.)
2) How can I take full advantage of my LLC/S-Corp?
3) How much should I pay myself?
4) How much should I pay every quarter in State and Federal taxes? (If possible, I would like to hit the number as close as possible, accounting for all my deductions, without going over/under)

Yours is not a legal question. I would suggest that you consult with a financial advisor and/or a CPA. Good luck!

 

[LdiJ]

I recently created a Georgia LLC that will be treated (taxed) as an S-Corp. I will begin a contracting job soon (Software Engineer) and will be paid corp-to-corp at $115/hr. I am expecting $220,800 gross income.

I have several questions in order to maximize my net income after State and Federal taxes:
1) What should I be keeping track of for deductions? (phone/internet bill, car mileage, health insurance, etc.)
2) How can I take full advantage of my LLC/S-Corp?
3) How much should I pay myself?
4) How much should I pay every quarter in State and Federal taxes? (If possible, I would like to hit the number as close as possible, accounting for all my deductions, without going over/under)

What you are required to do, under the law, is to pay yourself a salary based on the fair market value of your work, with proper withholding and a W2 issued to yourself at the end of the year. Using a payroll service is the most practical way to handle that.

You should keep proper bookkeeping records for expenses related to your work. Phone/internet would be only the prorated percentage that you use your phone internet for work purposes. Mileage would be unlikely to apply in your case as its unlikely that you will be doing more than standard commuting. Yes, you should keep track of your health insurance although that won't be handled through your business tax return, it will be deducted on the front of your 1040.

 

[davew128]

Yes, you should keep track of your health insurance although that won't be handled through your business tax return, it will be deducted on the front of your 1040.

While it will eventually end up on the 1040, it does get handled through the business return.

 

[LdiJ]

While it will eventually end up on the 1040, it does get handled through the business return.

Ok, I will word that a tad bit differently. The health insurance premiums will not be a deduction for your S-Corp. They will be a front of the 1040 deduction on your personal return.

 

[davew128]

Ok, I will word that a tad bit differently. The health insurance premiums will not be a deduction for your S-Corp. They will be a front of the 1040 deduction on your personal return.

Try again. Still wrong.

 

[tranquility]

Try again. Still wrong.

Where is the health insurance reported to stockholders owning more than 2% in an S-corp?

W-2.

I assume that is what you mean. Right? I suppose we can put it as an information item on the K-1 as well.

 

[davew128]

Where is the health insurance reported to stockholders owning more than 2% in an S-corp?

W-2.

Correct. HOWEVER, it is still an allowable corporate deduction on page 1 of the 1120S. That was my issue with her comment,

The health insurance premiums will not be a deduction for your S-Corp

It most certainly IS a deduction for the s-corp.

 

[tranquility]

Correct. HOWEVER, it is still an allowable corporate deduction on page 1 of the 1120S. That was my issue with her comment, It most certainly IS a deduction for the s-corp.

I agree it is deductible, I just didn't know where you were going with the clear, yet cryptic, answer. (Yes, I know it seems one answer cannot be both clear AND cryptic.)