Corporation Owner and Self Employment Taxes?

Collin Barter: not enough info. e.g., s corp, c corp, chk for w-2 ee earnings, expense remib, advance?

Coralie Goldsberry: No sir. See, the way it works is this. Let's say you are the owner of a corporation. Now, since the business entity in question is a corporation, you are allowed to put yourself on payroll and get a paycheck like any other employee. This will help in terms of having to not pay a huge tax bill at the end of the year for withholding taxes because they will be deducted on a weekly basis like any of your other employees, assuming they are paid weekly. Next, any check that you write to yourself that isn't for use of the business is a tax free distribution that doesn't need to be reported on your 1040, Individual income tax return. Now keep in mind, what I just said applies to an S-Corp. If the corporation that you own is a C-Corp, that you pay capital gains tax, not self employement tax. In fact, if you do own an S-Corp, the flow through inc! ome is not subject to Self employment tax anyway. Only income from a partnership or sole proprietorship is. The moral of the story is, you are not subject to self employment taxes from income recieved from your corporation....Show more

Nikki Sypult: Self employment tax is social security and medicare taxes paid by self employed persons and is part of the tax due on Form 1040. Corporation employees, including owners, are not self-employed so no self-employment tax is involved.

Travis Colomb: For feds, you will pay earnings tax and self employment tax. SE tax would be somewhat over 13%. earnings tax relies upon on many factors you do no longer point out. there'll additionally be state taxes and probably community.