PA: Corp-to-Corp and name needed for contracts

[pixelrogue1]

You cannot do that. It must be wages with proper withholding. You cannot do it as a contractor with a 1099. That is not an option.
Also, many people/companies illegally treat people as contractors when they are actually employees. Its not a "choice" for anyone or any company. A working shareholder of an S-corp may never be a contractor.

----
Ok. See related response above ^

 

[PayrollHRGuy]

-------
Summary of my new understanding:

1) Best option to maximize retirement contributions is through an s-corp (allows me to contribute as an employee, and the corp can contribute 25% of gross)

2) As an s-corp, I am required to manage salary through a W2.

3) Salary would then need to be run through a third party company to generate W2.

---
Anyone with recommendations on third party payroll companies, and ideas on how to keep associated cost to a minimum?
----
Debating now if the s-corp is worth the added expenses of W2 management (and associated registration expenses etc). Maybe stick with a more traditional Corp, foregoing the opportunity of the corporate contribution in favor of a more simplified 1099 (bringing me full circle back to the established LLC with the DBA)

1) OK
2) OK
3) In this post and a previous one you seem to think that a 3rd party payroll provider is required in some way. It isn't. A 940, 941, state withholding and unemployment payments are not that complicated.

 

[LdiJ]

-------
Summary of my new understanding:

1) Best option to maximize retirement contributions is through an s-corp (allows me to contribute as an employee, and the corp can contribute 25% of gross)

2) As an s-corp, I am required to manage salary through a W2.

3) Salary would then need to be run through a third party company to generate W2.

---
Anyone with recommendations on third party payroll companies, and ideas on how to keep associated cost to a minimum?
----
Debating now if the s-corp is worth the added expenses of W2 management (and associated registration expenses etc). Maybe stick with a more traditional Corp, foregoing the opportunity of the corporate contribution in favor of a more simplified 1099 (bringing me full circle back to the established LLC with the DBA)

You do not HAVE to use a payroll service. You can actually do your own payroll by hand (not easy and not cost effective) or you can get quickbooks cloud service to keep both your books AND handle your payroll. You have to do all the entries yourself, but you get the benefit of sending everything in through quickbooks.

I do highly recommend using a payroll service however. I feel that its money well spent. Most tax firms that I am familiar with do not do their own payroll.

 

[pixelrogue1]

1) OK
2) OK
3) In this post and a previous one you seem to think that a 3rd party payroll provider is required in some way. It isn't. A 940, 941, state withholding and unemployment payments are not that complicated.

--
Yes, I thought the only way to generate the required W2 was through a third party.

940 & 941 appear to be tax forms that you file once at tax time....or you submit payments to uc and state with each salary withdrawl.

From this thread (and thank you to EVERYONE chipping in this has be so helpful) - it appears the W2 is required for s-corp. How would one obtain a W2 if not through a vendor (or Quickbooks?)

 

[LdiJ]

--
Yes, I thought the only way to generate the required W2 was through a third party.

940 & 941 appear to be tax forms that you file once at tax time....or you submit payments to uc and state with each salary withdrawl.

The 940 is filed annually. The 941 is filed quarterly. It is necessary to make monthly federal tax deposits. State forms and deposit requirements will vary by state.

From this theead (and thank you to EVERYONE chipping in this has be so helpful) - it appears the W2 is required for s-corp. How would one obtain a W2 if not through a cendor (or Quickbooks?)

You can get blank ones from the IRS and then either fill them out by hand or type them out. There are also some websites where you can fill out a W2 to be sent in electronically.

 

[pixelrogue1]

You do not HAVE to use a payroll service. You can actually do your own payroll by hand (not easy and not cost effective) or you can get quickbooks cloud service to keep both your books AND handle your payroll. You have to do all the entries yourself, but you get the benefit of sending everything in through quickbooks.

I do highly recommend using a payroll service however. I feel that its money well spent. Most tax firms that I am familiar with do not do their own payroll.

-----
Book keeping itself wouldn't be a need. Quickbooks payroll appears to $24/month. l (though unclear on the W2 side of it.)

Anyone here use Quickbooks strictly for payroll only?

 

[PayrollHRGuy]

I don't use it but it, at least, used to have a W2 print function.

 

[LdiJ]

-----
Book keeping itself wouldn't be a need. Quickbooks payroll appears to $24/month. l (though unclear on the W2 side of it.)

Anyone here use Quickbooks strictly for payroll only?

The W2 is part of payroll. They can do it. They might charge a small separate fee for the end of the year filings, including the W2.

 

[PayrollHRGuy]

It is also very easy and free to file them on the SSA web site https://www.ssa.gov/employer/

 

[pixelrogue1]

Thought process:

So...you have a dedicated business checking account. Invoices get deposited into the accout. Expenses get paid from the account.

When it comes time to get paid, you must pay youself the same salary as other would get paid. Of that salary, you can either a) submit tax payments to their respective agency (ie state income tax) (via quicken payroll), or the b) set aside the amount you need to pay and submit with tax return in April.

Sound right?

----

Debating the value of the s-corp contribution to retirement against the con extras of an s-corp (taxes, registration fees, s-corps get more scrutiny, payroll related efforts etc.)
Would an s-corp be overkill?

 

[Taxing Matters]

3) Salary would then need to be run through a third party company to generate W2.

Doesn't have to be done through a 3rd party. You can do it yourself if you want; there are software programs you can get to do that.

Debating now if the s-corp is worth the added expenses of W2 management (and associated registration expenses etc). Maybe stick with a more traditional Corp, foregoing the opportunity of the corporate contribution in favor of a more simplified 1099 (bringing me full circle back to the established LLC with the DBA)

With a C-corporation (which is any corporation other than a S-corporation — what you are calling a traditional corporation) you still must handle the salary by withholding taxes, filing payroll tax returns, and doing the W-2. You cannot treat it as an independent contractor and issue a 1099 to yourself for it. And even if you could, that would defeat the purpose of using the corporation to establish retirement plans for yourself, since those plans are for employees, not independent contractors. You would likely come out worse using a C-corporation due to the double taxation of earnings even with the new lower corporate tax rates than using a S-corporation.

 

[pixelrogue1]

Yes, no intention of a c-corporation. I was thinking wither a new LC or back to the existing LLC with the dba.

 

[pixelrogue1]

The 940 is filed annually. The 941 is filed quarterly. It is necessary to make monthly federal tax deposits. State forms and deposit requirements will vary by state.



You can get blank ones from the IRS and then either fill them out by hand or type them out. There are also some websites where you can fill out a W2 to be sent in electronically.

And this is just once at the end of the year (w2). And the websites. You just type in the information?

 

[FlyingRon]

Thought process:

So...you have a dedicated business checking account. Invoices get deposited into the accout. Expenses get paid from the account.

When it comes time to get paid, you must pay youself the same salary as other would get paid. Of that salary, you can either a) submit tax payments to their respective agency (ie state income tax) (via quicken payroll), or the b) set aside the amount you need to pay and submit with tax return in April.

Sound right?

----

Debating the value of the s-corp contribution to retirement against the con extras of an s-corp (taxes, registration fees, s-corps get more scrutiny, payroll related efforts etc.)
Would an s-corp be overkill?

If you are talking about your S corp (corporation or LLC), you YOU can not do this. Your corporation/LLC must act like a normal employer.

If you decide to leave the LLC as a disregarded entity for your sole proprietorship, then yes you just file quarterly estimated tax payments and settle it up on the 1040 at the end of the year.

 

[LdiJ]

Thought process:

So...you have a dedicated business checking account. Invoices get deposited into the accout. Expenses get paid from the account.

When it comes time to get paid, you must pay youself the same salary as other would get paid. Of that salary, you can either a) submit tax payments to their respective agency (ie state income tax) (via quicken payroll), or the b) set aside the amount you need to pay and submit with tax return in April.

Sound right?

----

Debating the value of the s-corp contribution to retirement against the con extras of an s-corp (taxes, registration fees, s-corps get more scrutiny, payroll related efforts etc.)
Would an s-corp be overkill?

Possibly. That is a decision that only you can make.