Quote:
Originally Posted by Rev.Vassago
But with an S corp comes a lot of responsibility and possible expense at maintaining it to the IRS standards.
The only thing the IRS cares about is if you used the right form. You may have more of a hassle with the state of incorporation than the IRS. As long as you have kept your receipts and records straight, it is only a matter of putting the right figures in the correct place. That is what you need to do as a proprietorship or corporation. The "S-corp" is only a form you fill out with the IRS. It is called a sub chapter S election. It prevents you from being taxes twice. Either the corporation or individual pays the taxes. Essentially, you have the protection of a corporation, but are taxes as a partnership. In a standard "C-corp" both the corporation and individual are taxes. Both offer the same protections. You will never be 100% guaranteed not to be included in a lawsuit. If you operate your corporation as a separate entity, you should keep your protection in tact. If you pay yourself a salary from the corporation, you will need to pay taxes on that money. If you pay yourself in dividends, you should not have to pay Social Security Taxes on that amount. You can also opt out of Social Security and not have to pay anything into the fund. The catch is that you will never be able to collect Social Security benefits.