Tax Guru – Ker$tetter Letter

Q:

Subject: c corp

Hello,

I own my own design company…(architecture w/out a license yet).

I make about 50,000 a year up to this point.  I am getting much busier and will probably double what I have been making.

I am about to file to be incorporated.   It sounds like to me from reading your article that I should stay a c and not go to an s.

I realize that I need a professional to figure all of this out….but I was wondering how a couple of things will affect me.

One is employing my wife part time…

employing my children ( under 12 years old )

and working from home..

Do you have some suggestions on this..

A:

There are far too many options to consider and possible scenarios that can be used to achieve your goals for me to even begin giving you specific advice via this medium.You all will need to work directly with an experienced tax pro who can analyze your unique circumstances. I wish I could help; but I already have too many clients to take care of properly; so we are still trimming back on the difficult clients and are not accepting any new ones at this time. 

Any good tax advisor should be able to assist you with the details of hiring family members, including how best to do it through a corp, as well as through a Schedule C business, which is generally a bigger tax savings for employing kids under 18.  As I’ve said before, if you work with a tax pro who uses the TaxCoach Software service, s/he will be able to produce some very informative reports on the employing of family members.

Unfortunately, we don’t have anyone specific to whom we could refer you. I did recently post some names and links for some like-minded tax pros around the country. 

If you haven’t already done so, you should check out my tips on how to select the right tax preparer for you.  

I wish I could be of more assistance; and I wish you the best of luck.  

Kerry Kerstetter