Central Illinois | Longswamp - 12/27/2015 04:44
Fair enough. Keep playing it "safe" then. I have no problem taking full advantage of what the Code offers. Like I said, I went through a commodity wage audit and while they didn't like it, there was nothing they could do. Not one dime of ss wage was being paid from farm income.
I have no problem with you taking advantage of what the code has to offer. The problem is you just explained that your main purpose was to "eliminate" the taxes which is not a valid business purpose for commodity wages and they could have made them subject to S.S. taxes. (You can have that as your "true main purpose", but it should never be explained like that). You also have other mitigating circumstances (off farm W-2) that is not typical of most S Corp owners. It is obvious that you did not argue these point during the wage audit or they found little $$ to go after due to your W-2 earnings. I believe it is poor financial advice to try to eliminate all social security taxes for most farmers. I am all in favor of reducing these taxes. It all comes down to risk vs. reward.
I agree that Social Security has a poor return on investment after the first "bend point" (Tier that you can expect to return 90% of what you invest - around $9900 in 2015) because it drops to 32% and 15% in the next tiers. Up to the first "bend point" you have little incentive to reduce the taxes. |
About borrowing money and paying it back.
