I do internet marketing and want to incorporate in wyoming since they do not have corporate income tax
I do not have employees.
im expecting profits anywhere from $0-5000 per month.
for federal tax
purposes i need to decide between the following entities:
C-corp: I would pay the corporate taxes
then self employment tax
in addition to personal income tax on anything paid to me? I would be able to pay dividends
at the 15% tax rate?
C-corp with S status: I would pay self employment tax in addition to personal income tax? I would be able to pay dividends at the 15% tax rate?
LLC: I would pay self employment tax in addition to personal income tax?
LLC with S status: I would pay self employment tax in addition to income tax? I would be able to pay dividends at the 15% tax rate?
.I also read here: http://en.wikipedia.org/wiki/Self-employment. it says that:
"The self-employment tax in the United States is typically set at 15.30% which is roughly the equivalent of the combined contributions of the employee and employer under the FICA tax."
"Generally, only 92.35% of the self-employment income is taxable at the above rates. Additionally, half of the self-employment tax, i.e., the employer-equivalent portion, is allowed as a deduction
Does this mean that for self employment tax i would only pay self employment taxes on 92.35% percent of my personal income at a 7.65 rate (15.3 minus the employer-equivalent portion) tax rate?
Also are state taxes deductible as expenses for federal income taxes?
Im just trying to figure out the best way to set this up for tax purposes.
Any other scenarios or recommendations based on the 0-5000 profits per month and no employees would be of great help.