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SDTM BK - Members Only

Hello clients,
Many of you have asked the same questions as you proceed along your business journey. As an added value only for our bookkeeping clients, I have added answers to some of your most frequently asked questions below. Keep this page marked as I will update it as questions repeat themselves among multiple clients. I will also be adding links to specific articles I believe are helpful. I hope you enjoy.

What extra deductions are available as an LLC?

Coming Soon

How do I deduct my home office ?

Coming Soon

Can I deduct my car?

Coming Soon

When should I move from a Sole Prop to an LLC ?

Coming Soon

I have an S-Corp. Should I be on payroll ?

YES! This is one of the most common mistakes and biggest red flags for IRS. A big tax advantage of starting an S-Corp is avoiding Self Employment Tax.

Let’s say that your business made $100,000 in 2021.

As a Sole Prop, you would pay approximate 15% or $15,000 in Self Employment Tax in addition to everything else.

As an S-Corp, you can pay yourself a ‘reasonable salary’ (normally 40 – 60% of your next income). This is subject to a similar tax through payroll. The rest of the income is passed through as a profit distribution. It avoids 15% Self Employment Tax. In the above case, if you salary was $50,000, the remaining $50,000 would avoid S/E tax saving you $7,500 annually.

Some S-Corps pay no salary to try and avoid all S/E tax. When the IRS finds out, they will subject all net income to S/E tax and penalties going back up to 7 year.

Save yourself the headache. Get on payroll!

What Payroll Company Should I Use?

We only use GUSTO. 

What tax strategies should I use as a business?

Coming Soon

What are the best retirement plan options ?

Coming Soon

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