I was thinking of starting a side company/ S Corporation since I am currently a consultant. I am worried about initial losses that the S Corporation might incur.
Since I expect to be on a W-2 in the near future I am wondering if the loses that I incur with the S Corp can be used to offset/ deduced from my W-2 salary?
thanks
S Corporation
Re: S Corporation
yes, the net income or loss from the sub S " passes thru " to your personal 1040; a loss would be listed on your schedule E and would offset W-2 income...
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Re: S Corporation
The income on the W-2 could be offset by the S-Corp losses on the K-1 for income tax purposes. However, you'd still pay SS and Medicare on the W-2 wages.
IMO you'd be better off with an LLC while there are losses in the company, then convert to an S-Corp when it turns profitable. The S-Corps can save you in SS and Medicare on the K-1 profits.
IMO you'd be better off with an LLC while there are losses in the company, then convert to an S-Corp when it turns profitable. The S-Corps can save you in SS and Medicare on the K-1 profits.
Re: S Corporation
IMO you'd be better off with an LLC while there are losses in the company, then convert to an S-Corp when it turns profitable. The S-Corps can save you in SS and Medicare on the K-1 profits.
If I am the only employee and owner does an a LLC still make sense?
If I am the only employee and owner does an a LLC still make sense?
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Re: S Corporation
That's called a "single member LLC", and you don't have to file a separate return for them. Just report the income on Sch C of your 1040.doclotek wrote:if I am the only employee and owner does an a LLC still make sense?
Re: S Corporation
Yes, but keep in mind, losses can only be taken if the shareholder has sufficient basis in the corp.Bulldawg wrote:yes, the net income or loss from the sub S " passes thru " to your personal 1040; a loss would be listed on your schedule E and would offset W-2 income...