Funny from Funny About Money wrote in with additional questions about the advantages and disadvantages of structuring a business as an S-corporation.   I’m sure other folks have similar questions, so I thought I’d respond in a post to help readers find the answers (rather than leaving them buried deep in the comment boneyard).

Funny wrote:

Thank you for this information!

My tax lawyer formed an S-corp for me and then apparently left town. Haven’t been able to get an answer about how I pay myself and when, how, and where I send the taxes. Or about these idle questions:

Do you have to pay yourself on a monthly or semimonthly basis? Or are you allowed to pay your “wages” quarterly or yearly?

If you pay yourself (this assumes you have no other employees) more often than once a year–say, monthly or quarterly–does the corporation have to send in the FICA and other taxes each time a paycheck is disbursed? How? Where?

And…uhm… This is going to sound stupid, but given the amazingly stupid stuff I’ve encountered in trying to figure out Medicare and Social Security, “stupid” may be the order of the day. So here goes: there’s a law that says you have to prove each employee is a US citizen. Do I the corporation’s employee have to prove to me the corporation’s director that I was born in the USA? Is there some government agency where I have to depose that my employee (me) is a citizen? What will happen if I just say, should I be challenged, that I’ve seen my birth certificate and believe it to be authentic? Continue Reading »

With the economy in the doldrums, many folks are starting businesses to bring in a little side money.  If you decide this is for you, there are a few important steps to take in forming your new venture.

I’ve written before about the importance of forming a limited liability company (LLC) to protect your personal assets.  Today, I’d like to discuss the advantages (and disadvantages) of forming an S corporation. Continue Reading »

A recession might not seem like the best time to start a business, but as Paula recently wrote, a slowdown can provide you with the time and financial incentive to start that business you’ve been planning.

If you’re starting a new venture you should consider creating a limited liability company — an LLC.

Whether your new venture is selling wristbands announcing your new unemployment,  presenting makeup tips on YouTube, or tattooing pets, there is potential liability in your new venture.  While you should make every effort to deliver a quality service and satisfy your customers’ expectations, things can go wrong. Continue Reading »