I am 16 years old and I love learning about this stuff my financial life is going to be on point.keep giving us your knowledge about tax’s and your business knowledge ❤😊
If you're already educating yourself about this now, you'll be light-years ahead. I spent my teenage-hood fucking off and getting in trouble. 20 years later and I'm just now learning this stuff. Good on you.
you're 16 and this interests you? Keep it up. I am 40 and making myself learn this. Wish I knew it at 16 or even 24. It really is all like a game. so learn the rules.
Most helpful tax video I have seen. I love learning about what is needed for an s-corp because all this is new and not many CPAs walk you through this. Much appreciated.
Refer to mark 19:42. Sorry. Form 940 is NOT the annual equivalent of Form 941. Form 944 is. Form 940 is for filing Federal Unemployment. Which is neither FICA, Medicare or Federal Withholding. And, that form is tied to your state unemployment filing. How do I know? I am filing them right now for several companies in my tax firm.
I have a question, I worked in sales all of 2023 and had my earnings deposited into my personal bank account as usual, and then in December I started an S-corp after hearing coworkers tell me i should. I got it all set up and have an EIN number, but I am still waiting on approval from the IRS on the 2553 form ( which i heard can take up to 2 months ). With this all said, will I still be able to take advantage of paying myself a salary/distribution from the 2023 year or is it too late? Will i be able to take advantage of any tax savings via my scorp or will it only apply to everything i make in 2024? Lmk thanks!
QUESTION: ❓ My tax guy said I should be using a Payroll company to pay myself a salary as an employee of my business. But I hate that I have to pay $75 a month to get access to my own money. So you're saying that I can just make transfers from business to personal as distributions? Or should I keep payroll and just make transfers when needed as note them as distributions?
As an S-Corp, you still need to use a payroll company to run payroll to pay yourself the "reasonable salary". The remaining funds, you can use as a distribution.
If I am trading futures and I want to take advantage of the 60(long-term)/50(short-term) capital gains tax benefits, will an S-Corp allow me to make use of such benefit at a personal income reporting level?
I back dated an SCorp. For that filing tax year, I did receive a reasonable wage in w2. However, I did withdraws as cash transaction to pay for business credit cards. I also purchased property from the business account. Will these withdrawls be considered as a distribution. I think I have excess distributions since. I took out multiple business loans. Thank you Carlton.
Just a small mention; You can deduct the business part (half) of the self-employment tax as an expense. Also remember pay and file State and Federal Unemployment Taxes (SUTA / FUTA), and last but not least if applicable remember to take the QBI deduction which can save you a substantial amount in taxes.
Does self employment tax turns into an expanse when switching to S-corp?? Is not SE tax the liability? S-corp is a pass-though entity last like an Llc. Pls, explain.
@@irinajen6379 The employer part (half) is an expense for the company. S-Corp is not an entity type but an tax election you make by the IRS. Both a LLC and a Corporation can elect to be taxes as an S-Corporation.
This is such a great breakdown! Definitely learned a lot! I have a question, when you have an LLC and you do an S-Corp tax election for taxes. Are you still considered an LLC or are you now considered a S corp because of the tax election?
Amazing video! Can distributions be used to invest into a joint account. Im starting an s corp and would like to use distributions to continue to invest into my vanguard account that I have with my wife as a tenants by the entirety?
My other half and I have been together for 24 years. I have student loan debt and don’t work so I don’t have to pay right now. Should we get married to get better tax breaks. Oh and I have land not in his name that I think he can benefit from with right offs for his business. If we did farming too!! I know it’s a lot. Any info given is truly appreciated!!!❤
at 15:50: correct me if I'm wrong please: The 15.3% paid from salary portion is not accurate because this 15.5% is made up of 7.65% Fica, Medicare, Social Security and (Something else???) You need to pay this 7.65% to FICA, Medicare, SS etc, regardless if salary or just self-employed income, so you are really only saving 7.65% , not the full 15.3% correct?
Probably not, unless you file all the necessary extra tax returns yourself (8 at minimum per year). 4 quarterly 941's Annual 940 W-2 W-3 1120-S Even if you do file them all yourself, your likely to have to purchase some sort of annual software subscription in order to do so. If not, your going to have to pay someone to file them. And this list doesn't take in consideration any additional state returns you might have.
Hello and thank you for this great video! I have a quick question, you mention that a reasonable salary is 30% of your net worth. Unfortunately, our business lost money this year, $15k, instead of profit. Should we keep the same amount of salary this year not knowing if we will have a profit or a loss? Thank you.
Instead of taking a distribution of 60k to buy a car or travel and paying federal taxes. Can't I just buy the car with the business or pay for a "business trip" and mark it as business expense or loss? (thus not paying federal taxes)
I have a 2 Milliom dollar business and I make about 500k in profit after deductions and losses. How do I become a shareholder in order to benefit from the hybrid payment model ?
Maybe a dumb question: Lets say I switch to S Corp from an LLC, if I already have a business bank account, should I make a new one when filing the switch or use the same business bank account when my company was an LLC.
Can you make a video regarding the distribution taxes and also what happened if the money that I have not spanned stayed in the account for next year. I am so confused about that my accountant doesn’t know how to explain to me. If I pay the taxes on distribution and the money stays on the business account roll over to the next year and if I have to take that money out, am I getting double taxation? So confusing.
Amazing channel, I have a question could you make a video about some good tax breaks for those that are contracted and how we should be doing our taxes to make the most of it
What I don’t understand is if my s-Corp makes a profit, it rolls into my personal and it increases my taxable income and I have to pay taxes on it… but if my s-corp makes a loss, I have to stream personal money into my business to make payroll. So what’s the point? How do I actually make money and keep it
Firstly, that’s why you have a holding company so your profit flows up to pay back the holding company. Secondly your personal money you invest into your business should be paid back like a loan. Thirdly if you have money left over you should be reinvesting that money back into your company to offset the amount of taxes your business has to pay. Instead of paying $100k in taxes you should invest in other business write-offs to offset the $100k. Then you pay taxes on what’s left….
I was told that if you have a business partner and are each taking distributions as an S-Corp, you are required to match distributions relative to each persons ownership percentage in the company. Is this true?
I have set up a LLC since last year but haven’t operated it as of yet because of not fully understanding how/what to do, so thanks for this video! I have a particular concern, that I don’t wish to put out there. Is there any way that I can message you privately? Thanks!
When you say take a distribution in the form of a car or a computer, are you saying the company buys it for you or is this an asset already owned by the company that you then take possession of for personal use?
What if you want to build your business on a defi crypto platform, and you start with your own funds and collateral, can you use yourself as your bank? Or MUST you get a business bank account? I don’t really want to use the banks money and I honestly don’t need to make a ton of profit. But in defi I would have to move to scorp for the X number of “members“ there would be. Members would be receiving much more % of business profits in my company 😊
Small percentage token holders getting fair benefits for their contributions. That’s what I’d like to build. Sounds like, if I want my own business, I still have to go by fed rules and use banks 🤔 I’ll be legal, but I’m going to try to find ways around those entities, other than paying my taxes. I’ll pay those. Wish I could see where they go on a blockchain and have governance on such issues.
does anyone know if i file for an LLC and form an S-corp at the end of a year, will all the income from my business in the year I formed the business be counted as standard self employment income, or can I use the strategies listed above? IE: self employed in January, form S-corp in Decemeber
Can you please make a video for creatives such as freelance photographers who make under $15k annually as a side hustle? Do we qualify to elect to file as S CORP with an LLC
📌 *Nice video, love how you take your time to educate your viewers. You gave me the mindset to invest my savings now I have made profits over $120k Right now and still making more , I am enjoying a good life with what I made investing. Indeed ‚building a Portfolio income (investing) through a licensed investment adviser is one out of many ways to earn passive income.*
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