J
John Galt
Guest
Here's another one I never saw coming.
Since I shut down my manufacturing company in 1993,
I have taken dividends (I am sole owner). The company
had a large NOL which sheltered its income and so it did
not need the deductions that paying me a salary
or fees would have provided. This kept the paperwork simple. At year end I issue a 1099/1096, report my income and that's it. My income is so low that I pay no fed. taxes, so not a problem, except the corp. has made a profit about every year since 1993 and now, the NOL is almost used up.
Once it disappears, the only solution I can see is to start
paying myself a salary (or fees) instead of dividends,
in order ot give the corp. more deductions. The corp.
and I should both remain tax free at that point (unless the corp. makes a lot of money) except for paying in FICA taxes again.
I really don't see any other way, My corp. is a personal
holding company and the taxes on PHCs are draconian. In fact,
I had a CPA tell me I should consider buying an operating company just to avoid being classed as a
PHC. Obviously I am not doing that.
Have I missed anything?
JG
Since I shut down my manufacturing company in 1993,
I have taken dividends (I am sole owner). The company
had a large NOL which sheltered its income and so it did
not need the deductions that paying me a salary
or fees would have provided. This kept the paperwork simple. At year end I issue a 1099/1096, report my income and that's it. My income is so low that I pay no fed. taxes, so not a problem, except the corp. has made a profit about every year since 1993 and now, the NOL is almost used up.
Once it disappears, the only solution I can see is to start
paying myself a salary (or fees) instead of dividends,
in order ot give the corp. more deductions. The corp.
and I should both remain tax free at that point (unless the corp. makes a lot of money) except for paying in FICA taxes again.
I really don't see any other way, My corp. is a personal
holding company and the taxes on PHCs are draconian. In fact,
I had a CPA tell me I should consider buying an operating company just to avoid being classed as a
PHC. Obviously I am not doing that.
Have I missed anything?
JG