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For larger income Lyft/Uber drivers (probably those in SF/NYC), is it common to setup an S-Corp? Or you could setup an LLC with S-Corp accounting.. With such a
by aantix 9y ago
For larger income Lyft/Uber drivers (probably those in SF/NYC), is it common to setup an S-Corp? Or you could setup an LLC with S-Corp accounting..
With such a low average earning, they could basically pay FICA on the first 20%, but take the rest as a dividend distribution and avoid those taxes. Would save them about an extra 18(?)% on taxes for the cost of a CPA & S-Corp filing (probably about $1800/yr).
EDIT: Looks like it would be fairly easy..
1) Create a corporation through LegalZoom (~ $400)
https://www.legalzoom.com/business/business-formation/inc-overview.html https://www.legalzoom.com/business/business-formation/inc-ov...
2) It'll take a couple of weeks, but they'll receive an EIN (employer identification number). Submit the "EIN" to Lyft or Uber.
http://www.ridesharingdriver.com/driving-with-an-llc-or-corp-how-to-send-your-ein-to-uber-or-lyft/ http://www.ridesharingdriver.com/driving-with-an-llc-or-corp...
- adanto6840 9y agoYou can get the EIN instantly from the IRS website, though the service may only be available during business hours. The process is fast and straight-forward, and you'll finish the transaction with a PDF that contains the new EIN.
- myroon5 9y agoCan dividends be issued at-will? Or are they restricted to being quarterly / pre-planned / etc.?
- aantix 9y agoSince you'd be the only owner of the S-Corp, according to my CPA, they can be issued at-will (you don't need to hold a meeting with yourself). I just transfer from the business account to the personal account and mark the transaction as a "DIVIDEND". My CPA takes care of the rest.