The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: S Corp: are owners "self employed"||Date: 10/13/2006 1:44 AM|
|Author: cslob||Number: 89101 of 122021|
I am part owner of an S Corporation who is my employer (i.e. a shareholder).
Why does the IRS consider me 'self-employed' ? Just because they do?
The reason I ask is related to our SEP IRA plan ( Under SEP, all employess must get the same percentage contribution, part owner or not.) It complicates accounting and obfuscates the tax situation because the contributions to non-owners are a normal business expense (employee benefit) but contributions to owners are not, and appear as profits of the corp that fall thru to owner's personal taxes where a "Self-employed SEP Deduction" is taken personally. Follow that?
This all comes out tax neutral, but it still shows that the company has made (and still has) money that in fact was spent on a legitimate purpose. In fact we try to spend much of (what would have been) profit into the SEP.
I know, ask my accountant--but you see I've just told you what I think he said--and it doesn't make any sense!
When I go to a bank for a mortgage, they don't think I'm self employed. I have a salary, benefits, seniority, a W2, etc and very little say about how the business is run.
Can anybody shed light on this? Do I have something wrong?
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|