Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I operate as the only employee of a PLLC. I have created a

Customer Question
I operate as the only...
I operate as the only employee of a PLLC (professional limited liability company). I have created a compensation agreement that pays me a yearly salary of $1.00 and regularly distributes bonus/dividend of $25,000.00 every two months (which I can defer based on the health of the company). All revenue generated by me is property of the PLLC per the compensation agreement. Any money left at the end of the year is dividend to me minus 3 months operating expenses. I am trying to reduce either SE tax or payroll tax. Will this strategy provide any relief? Or, will I still be on the hook for the 15% payroll tax in addition to federal? I also act as the manager as the PLLC.
Submitted: 7 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 6 minutes by:
3/1/2010
Tax Professional: RD, Certified Public Accountant (CPA) replied 7 years ago
RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8,784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
Verified

AS an employee of a LLC - (if the LLC is filing as a S Corp)- you are required to take a reasonable compensation and pay employment taxes on the same.

Balance profit can be taken as a draw and you will not owe self employment tax on such profit taken by you.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

 

Ask Your Own Tax Question
Ask RD Your Own Question
RD
RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8,784
8,784 Satisfied Customers
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..

RD is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I want to know if S corporation stocks can be transferred
I want to know if S corporation stocks can be transferred from brother to brother without paying for the stocks. The only stock holders are my brothers and the 51% stock holder want to retire. He says… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I would like to open a business:to prepare tax returns for
Hello! I would like to open a business:to prepare tax returns for non resident,more exactly for students who come on a J1 -Visa ("Summer Work and travel" programme=where they work for aprox 3 months i… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have assumed 143,000 of personal liability for my company.
I have assumed 143,000 of personal liability for my company. I need to show this on my tax return for the company as a liability. The liability is for funds I have personally borrowed and lent to a co… read more
Carter McBride
Carter McBride
LLM
227 satisfied customers
I am a consultant (LLC). I paid a foreign entity a
I am a consultant (LLC). I paid a foreign entity a consulting fee in 2017. I understand that as long as I have a record of the entity's W-8BEN, I do not need to file a 1099-MISC. Can you point to the … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
I make around 28k in a year. I'll be getting a bonus of 70k
I make around 28k in a year. I'll be getting a bonus of 70k this year for a military reenlistment. What can I expect to be taken out and what can I expect to get back on my taxes next year … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
Would I be able to deduct my gym membership as a business
Would I be able to deduct my gym membership as a business expense in my S Corp as a 50% S Corp shareholder?… read more
Carter McBride
Carter McBride
LLM
227 satisfied customers
I have two investment properties and am buying a primary
I have two investment properties and am buying a primary residence. What are practical implications of forming an LLC re investment properties to protect me from personal risk and liability?… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,777 satisfied customers
If I only made 12k last year and I'm married, filing
If I only made 12k last year and I'm married, filing jointly, is it required that I file taxes at all?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,061 satisfied customers
My husband and I have our own company. a small business. we
My husband and I have our own company. a small business. we sponsor an individual to race outdoors sports adult cart racing paying all the involved expenses 100% to use 100% of the cart body to advert… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
I just need to know our balance owed to IRS please, My
I just need to know our balance owed to IRS please … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I had my ira rollovered. My old bank did not take out mt
I had my ira rollovered. My old bank did not take out mt minimum pay out. My new bank did not receive the rollover until 12 29 2017. I found out about the mess up on 1-7-2018.How can I withdraw the am… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
If my husband and I file our income taxes married, filing
If my husband and I file our income taxes married, filing separately, can we alternate who gets to claim things like property tax deduction? We live together in the same home.… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,061 satisfied customers
I have a question that Dr. Fiona - CPA is working on and she
Hello, I have a question that Dr. Fiona Chen - CPA is working on and she suggested I ask a RE lawyer as well.My issue is in regards ***** ***** 1031 exchange. I sold a rental property and identified a… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
What is my tax balance for 2016 and 2017. My SSN 302362465.
What is my tax balance for 2016 and 2017 JA: The Accountant will know how to help. Please tell me more, so we can help you best. Customer: My SSN###-##-####JA: Is there anything else important you thi… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have over $300K of foreign tax credits available for me to
I have over $300K of foreign tax credits available for me to use while I was an XPAT outside the U.S. I am now back in the U.S. and only spend a few days working overseas. I am looking for tax strateg… read more
TaxWhisperer
TaxWhisperer
Principal
Master's Degree
24 satisfied customers
I am a Co-Trustee in my mother's Irrevocable Trust. Did I
I am a Co-Trustee in my mother's Irrevocable Trust. Did I just read that the assets in an Irrevocable Trust are NOT subject to PA Inheritance Tax? I was preparing to pay the inheritance tax from the p… read more
abci168
abci168
Principal
27 satisfied customers
I have a federal tax lien filed in 2015. The date of
I have a federal tax lien filed in 2015. The date of assessment is 2008 and other is 2009. I have read that each will be zeroed after 10 years and lien satisfied. Will IRS satisfy both in 2018 or wait… read more
Fred Rook
Fred Rook
Corporate Controller
BSBA
60 satisfied customers
My friend won a jackpot in a casino and received a form
my friend won a jackpot in a casino and received a form 1042S. How do we treat this form in his tax return?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x