Posted by Randy_OH on April 07, 2002 at 13:03:45:
Cory,
If you post this on the main chatboard, I think you will get more of a response. Only lawyers are allowed to answer questions on this board.
Randy
Schedule C? - Posted by Cory Taylor
Posted by Cory Taylor on April 07, 2002 at 24:44:46:
Why do people hammer schedule c so much? I believe that setting up an LLC disregarded for tax purposes is the best way to go for any single member business for simplicity sake. Does anyone agree with me? I believe the amount saved in tax preparation far outweighs any benefit from savings in social security and medicare taxes. And within a year or so all self employed health insurance will be tax deductable. So really, I think the fringe benefits of owning a corporation are dissolving. I just feel I have lots of control over my tax picture when it comes to a schedule c business as opposed to any other type of entity. I dont have to pay myself a salary and file quarterly tax returns. I just have to make my four estimated tax payments per year and if I see I am going to make a hefty profit for the year, i just take on some some expenses before years end and minimize my tax liability.
Many people point to the fact that schedule c businesses are audited more and that is true. But I have had a friend that has worked with the IRS for 15 years, and he says that the reason that these businesses are audited so much is because the people that are filling out these forms do not know what the hell they are doing! It is because that many of these schedule c’s are being prepared by individuals and not professionals. Many of these individuals filing schedule c’s have never even heard about a self employment tax. And that is where alot of these audits come from. It really makes a lot of sense for the very high audit rates. So if you do a good job in record keeping and file using a program using turbotax, you should have little to fear of an IRS audit.
Cory