Every contract I have has very similar language with the exception of the amount it takes to continue to receive commissions.
Assignment of commissions
- Thread starter jasperjohns
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BTW, Columbian has two different section in their payments after termination. For the ordinary business including FE it goes to your beneficiary or estate.. no license required.. However, for the MDO (Monthly Debit Ordinary) business the person receiving the renewals has to be licensed as they collect the premiums (even if it is all mail pay).. You cannot provide any service to receive the renewals/service fees without a license.
WiscBroker
Expert
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An accountant friend of mine who used to work for the IRS told me to be very careful with that approach because they will usually come after you and claim the distributions are essentially the same and considered se income as well, especially for self employed individuals. I have been wanting to do this S corp change but he scared me with that comment and now I don't know what to do...
S corp distributions are 100% legit as long as you're paying yourself a reasonable salary.
My accountant has always said that if at least 1/3-1/2 of your income is subject to SE taxes, then your likelihood of getting penalized for anything else is very low.
Oh, I agree. 50/50 is really safe, 35/65 pushes the envelope.
Anything over that is just waiting for that letter in the mail.
Why would i have to pay myself something more than a reasonable salary I could hire someone to do the job I am already doing? I pay my assistant $70,000/yr and she does almost everything but meet face to face and sell.
I pay myself $75,000/yr and only meet with people. I could easily hire someone to do the selling for a gte'd $75k/yr.
The rest is profit from the business and should be taxed as such.
I pay myself $75,000/yr and only meet with people. I could easily hire someone to do the selling for a gte'd $75k/yr.
The rest is profit from the business and should be taxed as such.
WiscBroker
Expert
- 92
Per my accounting friend the question was posed in the context of being a sole proprietor with no employees so his approach to that would be, "well you're doing all the work so any income related to that should be taxed as self employment and that is likely how an IRS agent would look at it as well."
I can see if there are employees beyond the agent then the left-over profits would not necessarily be considered "self-employment" income.
I was a sole EE LLC for a number of years. My CPA asked the question what would a reasonable salary be to hire someone to do what I do. I have read the stories about some advisors/insurance agents getting nicked but all of them I have seen are also financial advisors.
Find a new accountant. This is largely an accepted practice and I agree with ATMs comments.
Once you hit the SS max, there is no reason to not utilize an s corp if available to you.
