Retire on renewals + avoid self employment

Nov 5, 2018

  1. PCBI
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    PCBI Super Genius

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    on top of taking 12,000 off top there are other deductions if u standardize instead of Schedule C lengthy return

    Trying to write things off as a business may be a thing of the past and not affect the renewals qualifying

    Itemized Deductions or the Standard Deduction: Which Is Better? - NerdWallet

    Interesting!
     
    Last edited: Nov 16, 2018
    PCBI, Nov 16, 2018
    #51
  2. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    The advantage of filing as an S-Corp is not in the deductions. You can file Schedule C as a Self Employed Individual, it's just not as inclusive/expansive as if you are an S-Corp.

    The advantage is in the ability to declare a Wage or Salary Income, and have the rest be paid as Corporate Profit.
    Salary Income is taxed FICA.
    Corporate Profits avoid FICA, and can be many times more than Salary.

    The catch is that Salary must be "reasonable and customary". Courts have used the phrase "what you would pay a competent & qualified 3rd party to perform the same tasks". And of course it takes a bit more admin time/costs. It all depends on your situation on if its worth it. But that is the main advantage of filing S-Corp, not deductions. (especially for an insurance agent who's expenses are usually pretty low)
     
  3. PCBI
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    PCBI Super Genius

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    I understand the adv of a corp but those days are past as of Oct.

    lookn for other deductions as a EZ40 return candidate w turbo tax now into retirement :)
     
    PCBI, Nov 16, 2018
    #53
  4. Allen Trent
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    Allen Trent Guru

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    Correct in terms of whether to itemize or take standard deduction for your personal return. Under the new tax laws & limitations on itemized deductions, the majority of Americans will take the standard deduction as most already do.

    However, this won't address the fact that you will still have to file a schedule C because your renewals will come on a 1099 that has no way to go directly on the 1040 EZ
     
  5. PCBI
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    PCBI Super Genius

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    1040 no EZ?
     
    PCBI, Nov 16, 2018
    #55
  6. PCBI
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    PCBI Super Genius

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    another deduction for 1099 contractors!

    Contracting Is Now a Better Tax Choice Than a Salary
     
    PCBI, Nov 16, 2018
    #56
  7. VolAgent
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    You can't file a Schedule C on a EZ return, and you can still take the standard deduction on the long form 1040 after filing all the schedules that go with being self-employed and/or owning a pass through entity.
     
  8. PCBI
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    PCBI Super Genius

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    Good news!
     
    PCBI, Dec 4, 2018
    #58
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