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To: Zeneta

It is a common business model among the high-paid. You have a sub-S corp, rent yourself out to companies and invoice them, and they pay out all the money to yourself as a salary from your sub-S corporation. This allows you to dodge the 2% limitation of business expenses, and deduct your medical insurance as a business expense.

I go out to lunch with a guy like this. We discuss business for five minutes, and then he writes off 50% of the cost of the lunch as a business expense.


30 posted on 02/09/2016 10:08:58 AM PST by proxy_user
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To: proxy_user

Makes no sense to me.

If I invoice said company, there is no reason for them to do any W-9 withholdings. They would rather not be bothered by those paperwork requirements. I could be a Sales guy or a cleaning person and they would be much more inclined to just write a check and call it an expense.

As a Self-Employed person I get the gross amount and can manage my own deductions to off set my tax burden.


32 posted on 02/09/2016 10:30:29 AM PST by Zeneta (Thoughts in time and out of season.)
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