Flat tax?

#28
#28
What's your honest thought on a C corp comapred to a S corp for a business that generates about 800k gross annually and has 6 employees? 3 1090, 4 w2'd, and the owner. My old accountant was all about the S corp, my current one is all about the C corp and even more so about the LLC. All profits are put through as personal at the end of the year with the business owning very little assets itself.
 
#29
#29
lawgator1 said:
How about exempt the first 20k, tax the next 200k at 20 pct, and then everything after that at 30 pct?

No deductions.
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Law gattor let me ask you an honest question?

Let's say you tax someone at 30 percent who is making 300k. You think it comes out of their pocket or their employees pockets?
 
#30
#30
I like any system that forces illegals, drug dealers or anyone else to assume some of the tax burden. The fair tax system seems to do that by applying taxes to sales tax since everyone buys groceries and shops at Wal-Mart.

I'm sure there are some problems with that system that I haven't considered but it seems good on the surface.
 
#31
#31
Ihatethebuckeyes said:
What's your honest thought on a C corp comapred to a S corp for a business that generates about 800k gross annually and has 6 employees? 3 1090, 4 w2'd, and the owner. My old accountant was all about the S corp, my current one is all about the C corp and even more so about the LLC. All profits are put through as personal at the end of the year with the business owning very little assets itself.
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I can't think of a single reason you'd set that up as a C-corp off the top of my head from a tax perspective. Makes absolutely no sense whatsoever.

The LLC vs. S-corp varies depending on the situation, but based on what facts you've given me I'd say you are a perfect candidate for an LLC. Sounds like you have a single member LLC that would file a schedule C on your personal return and probably file a $100 minimum TN return (I assume you are in Tennessee).

I think I've read before you are in insurance and every broker firm like yourself I've seen (granted 2 or 3) is set up as an LLC.
 
#34
#34
tigervol9802 said:
I can't think of a single reason you'd set that up as a C-corp off the top of my head from a tax perspective. Makes absolutely no sense whatsoever.

The LLC vs. S-corp varies depending on the situation, but based on what facts you've given me I'd say you are a perfect candidate for an LLC. Sounds like you have a single member LLC that would file a schedule C on your personal return and probably file a $100 minimum TN return (I assume you are in Tennessee).

I think I've read before you are in insurance and every broker firm like yourself I've seen (granted 2 or 3) is set up as an LLC.
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I'm an actual LLC with my wife 35%. My telemarketing agency was set up as a C corp though. I do not know why he set it up as a C corp. At the time, the reason he gave me made sense. But I'm not an accountant. The telemarketing business makes alot more gross but nets almost the same since 80% of the cost are labor. I set the agency here up as a LLC when i bought it because the accountant here advised me too.
 
#35
#35
I was told not to be a sole prop llc because you could possibly go backwards in a lawsuit and while it has not been truly tested in court yet it could still open me up on the personal side.
 
#36
#36
Ihatethebuckeyes said:
I'm an actual LLC with my wife 35%. My telemarketing agency was set up as a C corp though. I do not know why he set it up as a C corp. At the time, the reason he gave me made sense. But I'm not an accountant. The telemarketing business makes alot more gross but nets almost the same since 80% of the cost are labor. I set the agency here up as a LLC when i bought it because the accountant here advised me too.
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I've never dealt with a telemarketing business so maybe there is something specific with the industry as to why he would advise it, but I'd still say it should be an LLC or at minimum an S-corp. That just doesn't make any sense at all based on the info you presented.

There are very, very few instances where I would advise a C-corp.
 
#37
#37
tigervol9802 said:
I've never dealt with a telemarketing business so maybe there is something specific with the industry as to why he would advise it, but I'd still say it should be an LLC or at minimum an S-corp. That just doesn't make any sense at all based on the info you presented.

There are very, very few instances where I would advise a C-corp.
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Didn't and doesn't still to me either. The telemarketing agency grosses way more though but the over head is almost 85%. It has become a real pain in my arse lately. If they actually keep the health insurance program in tact without changes I am probably going to shut it down and move it to Manila.
 
#38
#38
Ihatethebuckeyes said:
Law gattor let me ask you an honest question?

Let's say you tax someone at 30 percent who is making 300k. You think it comes out of their pocket or their employees pockets?
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By that logic anyone who employs anyone will never pay taxes. I actually employ 10 people. Maybe the feds should pay part of their haul from the employees to me?

Good luck with that.



droski said:
no
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Well-reasoned, if not succinct.
 
#39
#39
Ihatethebuckeyes said:
I was told not to be a sole prop llc because you could possibly go backwards in a lawsuit and while it has not been truly tested in court yet it could still open me up on the personal side.
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That I don't know, but I'd have a hard time believing if a state allows it as a legal entity that the veil could be pierced. Then again, I'm a number-cruncher and regret not going to law school weekly.

However, that reminds me........

LawGator -

Why does the state of Florida hate LLCs so much?
 
#40
#40
lawgator1 said:
By that logic anyone who employs anyone will never pay taxes. I actually employ 10 people. Maybe the feds should pay part of their haul from the employees to me?

Good luck with that.






Well-reasoned, if not succinct.
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So you employ 10 people. This means you are living at a certain lifestyle. You're telling me that if the taxes are changed to where you can no longer afford your lifestyle you're not going to throw the cost onto your employees?

if you're married and have kids you're lying? I'm not even going to sugar coat it. You're flat out lying. You may not hand down as much. But if it causes you to suffer the employees will not get a raise or you won't hire and throw more work onto your current staff. You know you will.
 
#41
#41
tigervol9802 said:
Would you favor taxing cap gains at the same rate, or do you think they should be taxed lower (or at all)?
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i'd be in favor of taxing cap gains at the same rate. i would not be in favor of the rich paying 50% higher taxes than everyone else.
 
#42
#42
droski said:
i'd be in favor of taxing cap gains at the same rate. i would not be in favor of the rich paying 50% higher taxes than everyone else.
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You really really don;'t belong in California Droski?

By the way, in my world, you could always vote and numerous times.

I might diagree with you on things but you aren't stupid.

:)
 
#43
#43
Ihatethebuckeyes said:
Didn't and doesn't still to me either. The telemarketing agency grosses way more though but the over head is almost 85%. It has become a real pain in my arse lately. If they actually keep the health insurance program in tact without changes I am probably going to shut it down and move it to Manila.
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Ask your CPA again why he did that. I don't get it.
 
#44
#44
I will.

What's your thoughts on bleeding the company? I've never done it but have a friend who owns hotels and he says he does it every year.
 
#45
#45
Ihatethebuckeyes said:
You really really don;'t belong in California Droski?

By the way, in my world, you could always vote and numerous times.

I might diagree with you on things but you aren't stupid.

:)
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the perfect weather, great food, and hot chicks are well worth dealing with every idiot liberal and our high taxes.
 
#48
#48
tigervol9802 said:
I'm becoming more and more of a proponent of a flat tax and cutting the capital gains rate to about 5%.
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IMHO, the only way a flat tax would ever work or be accepted is if it only applied to marginal income above the median national income. There are ALOT of people who file taxes but pay little if anything.
 
#49
#49
tigervol9802 said:
Would you favor taxing cap gains at the same rate, or do you think they should be taxed lower (or at all)?
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Regressively flat. Profit is to a great extent a measure of efficiency and innovation. Best case, tax at a descending tiers up to a certain percentage then no taxation after that. Ideally tax up to 10% operating profit at around 20% and no taxes on marginal profits above that level.
 
#50
#50
lawgator1 said:
By that logic anyone who employs anyone will never pay taxes. I actually employ 10 people. Maybe the feds should pay part of their haul from the employees to me?

Good luck with that.
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You do not pay taxes if you operate a business- you collect them. Taxes are a cost included in your budget just like employee wages. If your taxes go up, your outside costs go up like utilities and staplers, and you have no power to increase pricing... then those taxes will either come out of your pocket or your employees' pockets.

This is why replacing the income tax with a consumption tax makes alot of sense. The collection occurs at the same point and comes from the same sources... it is just far, far more efficient.

You have me curious now though... I am wondering what kind of business someone who believes like you do could actually run successfully. It has to be one sheltered in some way from market reality.
 
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