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To minimize your tax, you would be better suited to file as an S Corp.
Under an S Corp you pay yourself a "reasonable" salary, and that's the only amount of income that you have to pay employment taxes on.
With a sole proprietorship you have to pay these taxes on 100% of your profits
You can have S Corp treatment one of two ways: One, you start a corporation and elect S Status, or two you open an LLC and elect to be taxed as an S Corp.
Either way you get the same treatment.
Now, the very important thing to remember about S Corps is that you will have to file a return annually, even if you have no income or expenses
If you dont there are steep penalties.
How are you today? Have you been able to receive the rest of my response?
yes i did i am reviewing now. is the LLC as an Scorp the easiest and fastest way? I have to sign the contract next week so i want something quick and easy. Also, as an Scorp should I be the only worker/owner or should, i have my wife, child etc. as the partners or should i get a outside partner? thank you
The LLC has the greatest ease of formation, and it's easier to stay in compliance with laws. You don't need a partner - you can be the only owner/shareholder
ok so i will start LLC as Scorp.. would i get a SCorp TIN or LLC TaxID? Should I get that via the state of FL or Nevada?
You apply for an EIN as an LLC. I would also open in Florida, as that's your state of residence
ok great! last questions :) the recommendation is 60% salary and 40% dividend on the Scorp- correct?? I would also need to get business license?
That's correct. You've done your research. Both are correct.
wonderful thank you megan. unless there is anything else you think i should know you have answered my questions wonderfully ;)
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will do take care
Have a great day
i forgot the most important question!! the main contact this year (the 200K job) is w2 (because I di dnot have a comp set up when I started).. so should I just do sole prop until next year?