Did you form your S corporation so that you could reduce your self-employment taxes? To get this benefit, the corporation must be the one that actually earns the income.
When you earn the income in an individual capacity and assign it to your corporation, the IRS is going to crush you. First, the IRS moves the income to you personally, tapping you for both income and self-employment taxes, plus a good shot of hefty penalties and interest as well.
Sounds pretty bad, right? Well, believe it or not, it can actually get worse than this. Just ask Mr. Owen. He had an awful day in court. Trust us! You don’t want to end up like Mr. Owen. We’ll tell you his cautionary tale so you can avoid a similar nightmare.
In this article, we show you how to avoid getting crushed by the IRS as Mr. Owen did, and how to properly use your corporation to save on taxes. ... Log in to view full article.