S-Corp taxes?

Hi,

I would like to Start a Software Consulting, Development and Staffing Company. I want to intially start this business to Save taxes and show travel expenses.

I am employed with XXXX Inc. And my Wife is employed with YYYY Inc. She is a Software Consultant. She works for cleint Of YYYY inc. When i start by Business, we would like to Pass her Hourly billing through my company to YYYY Inc. When the client of YYYY inc Pays $30 per hour. I will be giving $20 Ph to YYYY Inc. the margin of $10 will go to my start-up company.

I am Citzen of USA. What kind for company is better in my Seceniro, S-Corp or C-Corp ?

When i start the Business, I dont want to run my Monthly Payroll? I have W-2 from XXXX Inc.
How the Taxes work for me?


Thanks in advance.

Typically S Corps have payroll taxes for employees and 1099 for consultants. They do not pay federal income taxes at the corporate level as the profits and losses pass through directly to the shareholders. As to whether your wife is an employee or a consultant depends on may factors which are outlined by the IRS (check out IRS.gov). If you perform work for your corporation even as an officer you are considered an employee and require payroll tax witholdings. I would recommend you contact a tax professional (CPA) for further guidance on how to handle your individual situation.

S corp will require W-2s and tax payments. The earnings from a S-Corp become personal earnings of the stockholders. C-Corp earnings are taxable for the company and only when dividends are paid will the earings be taxable. It is double taxation for those dividends.