Business Structure Selector4
2
[Company Name] Business Structure Selector [Date] [Company Name] CONFIDENTIAL Gray cells will be calculated for you. You do not need to enter anything in them. Planned number of owners 2 Required protection from personal liability Low Net income for business $250,000 Owner's share of income $125,000 Salary received from business $20,000 Owner's other income subject to self-employmen $20,000 Owner's marginal tax rate 28% State income tax rate on individual income 5.00% State income tax rate on business income 8.00% Partnership Corporation S Corporation Option available? No Yes Yes Yes Yes If no, reason option not available Election to be treated as corporation? (Yes/No) Yes Business tax return required None Form 1065 Form 1120 Form 1120S Form 1120 Protection from personal liability Low Low High High High Estimated Tax Liability Caused by Business Salary from business N/A $20,000.00 $20,000.00 $20,000.00 $20,000.00 Business income currently taxable to owners N/A $125,000.00 $0.00 $125,000.00 $0.00 Percent that is self-employment income N/A $1.00 $0.00 $0.50 $0.00 Income from business subject to self-employmen N/A $125,000.00 $0.00 $62,500.00 $0.00 Business income taxable to business N/A N/A $125,000.00 N/A $125,000.00 Individual Tax FICA tax withheld from salary N/A $1,530.00 $1,530.00 $1,530.00 $1,530.00 Tax on individual tax return: Federal income tax N/A $40,600.00 $5,600.00 $40,600.00 $5,600.00 Self-employment tax N/A $10,962.58 $0.00 $8,830.97 $0.00 Tax saved on self-employment tax deductio N/A -$1,534.76 $0.00 -$1,236.34 $0.00 State income tax N/A $7,250.00 $1,000.00 $7,250.00 $1,000.00 Total individual tax N/A $58,807.82 $8,130.00 $56,974.63 $8,130.00 Business Tax FICA tax withheld from wages N/A $1,530.00 $1,530.00 $1,530.00 $1,530.00 Tax on business return: Federal income tax N/A N/A $40,375.00 N/A $40,375.00 State income tax N/A N/A $8,400.00 N/A $8,400.00 Total tax paid by business N/A $1,530.00 $50,305.00 $1,530.00 $50,305.00 Tax on future year dividend on personal return: Federal income tax N/A N/A $35,000.00 N/A $35,000.00 State income tax N/A N/A $5,250.00 N/A $5,250.00 Total tax on individual income N/A $60,337.82 $49,910.00 $58,504.63 $49,910.00 Total tax on business income $0.00 $0.00 $48,775.00 $0.00 $48,775.00 Total tax on combined income N/A $60,337.82 $98,685.00 $58,504.63 $98,685.00 ffective tax rate — individual income N/A $0.42 $0.34 $0.40 $0.34 Effective tax rate — business income N/A N/A $0.39 N/A $0.39 Effective tax rate — combined income N/A $0.42 $0.79 $0.40 $0.79 Sole Proprietorship Limited Liability Corporation (LLC) Number of planned owners
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Transcript of Business Structure Selector4
[Company Name]Business Structure Selector[Date][Company Name] CONFIDENTIALGray cells will be calculated for you. You do not need to enter anything in them.Planned number of owners 2Required protection from personal liability LowNet income for business $2!"!!!#wner$s share of income $%2"!!!&alary recei'ed from business $2!"!!!#wner$s other income sub(ect to self)employment ta* $2!"!!!#wner$s marginal ta* rate 2+,&tate income ta* rate on indi'idual income .!!,&tate income ta* rate on business income +.!!,Partnership Corporation S Corporation#ption a'ailable- No Yes Yes Yes Yes.f no" reason option not a'ailable/lection to be treated as corporation- 0Yes1No2 Yes3usiness ta* return required None 4orm %!5 4orm %%2! 4orm %%2!& 4orm %%2!Protection from personal liability Low Low 6igh 6igh 6igh/stimated 7a* Liability 8aused by 3usiness&alary from business N19 $2!"!!!.!! $2!"!!!.!! $2!"!!!.!! $2!"!!!.!!3usiness income currently ta*able to owners N19 $%2"!!!.!! $!.!! $%2"!!!.!! $!.!!Percent that is self)employment income N19 $%.!! $!.!! $!.! $!.!!.ncome from business sub(ect to self)employment ta* N19 $%2"!!!.!! $!.!! $52"!!.!! $!.!!3usiness income ta*able to business N19 N19 $%2"!!!.!! N19 $%2"!!!.!!.ndi'idual 7a*4.89 ta* withheld from salary N19 $%":!.!! $%":!.!! $%":!.!! $%":!.!!7a* on indi'idual ta* return;4ederal income ta* N19 $ $!.!!7a* sa'ed on self)employment ta* deduction N19 )$%":5 $!.!! )$%"2:5.:< $!.!!&tate income ta* N19 $>"2!.!! $%"!!!.!! $>"2!.!! $%"!!!.!!7otal indi'idual ta* N19 $+"+!>.+2 $+"%:!.!! $5"=>.!! N19 $.+2 $.+2 $=+"5+.!! $+"!5"%+= %+"!&ocial security ta* 2"2=! %!":!5 =" 2"+25&/ ta* from A8ompany NameB ! %!"=5: +"+:% !4.89 7a* for /mployees and 3usinesses@a*imum earnings $=!"!!!&ocial security ta* rate 5.2!,@edicare ta* rate %."!!! $>"!! C 2, $!"!!! $! $!$>"!!! $%!!"!!! $%:">! C :"!!! $! $!$%!!"!!! $::"!!! $22"2! C :=, $%!!"!!! $+!">! $&ole ProprietorshipLimited Liability 8orporation#f the amount o'er 7otal corporate ta*
