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No, you don't. I have a C Corp and and no FTEs - just contractors - including myself. We're incorporated in California. I set up the company with legal counsel,
by andrewljohnson 18y ago
No, you don't. I have a C Corp and and no FTEs - just contractors - including myself. We're incorporated in California. I set up the company with legal counsel, at considerable (though thankfully deferred :)) expense. Both my lawyer and banker agree I don't have to have any employees.
I don't know about paying dividends - doesn't capital gains get taxed quite heavily? I think the normal route is to pay everyone as a contractor and let them sort out their own taxes.
You'll just need to send 1099s to all your contractors - and if you use special electronic payments through a bank like Wells Fargo, that'll take a lot of hassle out of it all.
- lrm242 18y agoDividends are taxed at 15% through 2010 which is usually lower than your tax rate, though not always. This, of course, assumes that the dividen tax rate isn't isn't raised by the new administration. And yes, the dividends that you are receiving have already been recognized by the corporation as profit and taxed at its tax rate. Your dividends are taxed twice.