|Many Sole Proprietors and Partnerships are envious of the Section 199A 20 percent deduction. Because of this, they turn to paying themselves W-2 wages to reduce their tax burden. WRONG! |
A Sole Proprietor or Partner may not be W-2 employees of their own Sole Proprietor or Partnership. Neither does using a Certified Professional Employer Organization (CPEO) create the possibility of paying W-2 wages to Partners or Sole Proprietors.
What you must do instead is elect to be treated as an S or a C Corporation. When you elect being an S or a C Corporation, many tax benefits are available to you, the owner.
If your company nets $150,000 a year, you can reduce your tax burden from $16,000 down to $13,000 or less! It could be more! Every $1,000 you save in taxes is like a $1,100-1,300 pay increase! The average business over pays $11,000 in taxes a year!
Need Help Implementing?
No worries, that’s what we do schedule an appointment then we can get you on your way to saving more money!