Re: Товарищ Митт ромни
"Self-Employment and Other TaxesOriginally Posted by Димуша
In our example above we mentioned that Fred and Sue were not taking a salary from the S corporation. The IRS position is that S corporation shareholders who perform duties for the corporation (and every corporation must have officers) must take a salary. Were it not for social security and Medicare taxes, the effect would often be a wash. That is, the corporation pays the shareholder a salary increasing his or her income, but the salary is deductible decreasing the income of the corporation that's passed through. Social security (FICA) and Medicare taxes affect the individual by 7.65% (withheld from pay) of salary; the corporation pays a like amount, but it's is deductible by the corporation. For rough planning purposes you can figure the effect of the tax at about 12% of the individual's salary up to the $106,800 (2010 amount; go to Corporate and Individual Income Tax Rates for the current year's threshold); amounts above that are still subject to the 2.9% Medicare tax. While you have to take a salary, it can be less than the income of the corporation.The self-employment tax is the social security and medicare tax applied to a sole proprietorship, partnership, or LLC. But here all the income of the entity is subject to the tax. Sole proprietors, partners in a partnership and LLC members don't take a salary. (There is an exception for limited partners.) The self-employment tax is 15.3% on the first $106,800 (2010 amount) of self-employment income. (Self-employment income is the net profit on Schedule C or amounts from a partnership K-1 multiplied by 92.35%.) Amounts in excess of that are still subject to the 2.9% Medicare tax. These taxes are deductible on your personal return. Thus, the effective tax rate if you're subject to the full 15.3% tax is about 12%."
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