Currently, I am a 1099 employee. In order to pay my SE tax (SS and Medicare tax),
Would there be a tax saving for me to form a corporation under my SS, and then pay my salary and taxes through the corporation, versus paying taxes directly to IRS (without forming a corporation). Please explain.
Thanks,
Lisa

>Moved from Forum Help<

Lisa:

If you pay on the same amount of money earned, you will actually pay the same amount of tax, it will just be incredibly more complicated if you set up a corporation to do it with.

Now, you CAN structure the payments you receive as income paid to the corporation, then draw both a salary and have the corporation pay you dividends. The salary is subject to employment (Social Security, Medicare, unemployment) taxes, while the dividends are not.

Again, this is exceptionally complicated, would essentially require the services of an accountant and would NOT save you a lot of money UNLESS your 1099 income exceeds $100,000.

Yes, report 1099-misc as your own income. Setting up corporation and then meeting it filing requirement is unnecessarily complicated things unless you have other reasons.