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Jacy, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 568
Experience:  Nine years individual income tax preparation and consulting
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A sole proprieter uses an employee leasing company to pay himself

Resolved Question:

A sole proprieter uses an employee leasing company to pay himself in which he recieves a w2 with proper social security payments. Does this need to be amended to reflect draws and in which self employment taxes will be paid on the 1040.
Submitted: 5 years ago.
Category: Tax
Expert:  Jacy replied 5 years ago.



So basically you are an employee of the leasing company if I understand you correctly. Your business collects revenue from its patrons, and pays expenses including a payment to the leasing company for your own services.


Your 1040, Schedule C will show gross revenue and expenses of the business. One of these expenses will be for contract labor (yours). The net profit of the business will then be subject to the self-employment tax. The amount of draws does not affect this tax.


Hope this has been helpful. Please click Reply if I can be of further assistance.


Thank you!


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