Taxes and corporations..... and me?
While working construction, my boss has spoken to me a few times about me becoming my own corporation. Why? To lower his paperwork and to increase the amount of money kept in my pocket. Now without going through the jargon and nuts and bolts of becoming a corporation, the questions that exist for my wife and I while considering this viable option: What is our social responsibility to paying social security taxes (Incorporating my work would avoid much SS tax)? If it is legal to become a coporation, write off all my business expenses, and not pay nearly as much tax as normal, is it right, and the best for not just me, but the world around me?
If anyone out there has made their business an S Corporation, I would love to hear your justification for your decision for reasons that are not primarily for your own benefit.
Let me clarify, I won't be employing new people, just myself. So the benefit of growing a business to hire other people is not an unselfish benefit for me.
Anyone?
posted by David Whitcomb at 9:28 PM
4 Comments:
Interesting thought. The Social Security system is, in effect, a system of support and giving to older people who have retired. Since the money being put into Social Security right now will not benefit those putting it in, there seems to be little greater good that could be accomplished by paying in less money.
On the other hand, if money saved from Social Security could be used to more directly benefit the community around you, it would certainly make it easier to see how you are helping the world around you. For example, if you save X amount of dollars in a month by forming this corporation, all or some of that money could be put towards feeding the homeless in your area, helping a charity, etc.
So I suppose in the end it is a choice of where you'd rather put your money to use. Interesting topic.
3:14 AM
I'll give this some thought. Your father was a sole proprietor...I'm not sure what the reasons. I believe that if he had been sued for any reason, our home would have been protected...not sure though. You might want to talk to an accountant.
10:56 AM
Mom, I actually think Dad must have been a corporation. A corporation provides protection of the home and personal assets while being a sole proprieter leaves all the sole proprieter's assests as fair game should a lawsuit come around...
If this is wrong, I am open to corrections, but am pretty sure from all of my reading that I am not wrong...
2:17 PM
I believe you are probably correct...
4:53 PM
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