I am reviewing the possibility of setting up a business in Arizona which will include maintenance of residential rental properties and separately, a private investigation firm. Initially, my activity will be limited to myself (no partners/employees). My biggest desire is to limit my tax liability and obtain every possible tax advantage.
Does it make sense to include both these business activities under one business? Also, I understand that the IRS has established that S-Corporations where the primary owner is also the primary services provider (i.e. the business does not exist without the owner's activities) cannot avoid Social Security & Medicare taxes by making dividend distributions, but should actually be reporting wages paid to the owner in the amount of his/her profit. This in mind, can you suggest the best business type (S-corp, C-corp, LLC, Sole Proprietor) to keep my tax obligations down? Finally, can C-corporations legally declare in their articles that all shareholder expenses will be paid? If so, might this be my best option or would I then have to report the C-corp payments as personal income taxable as wages?
Does it make sense to include both these business activities under one business? Also, I understand that the IRS has established that S-Corporations where the primary owner is also the primary services provider (i.e. the business does not exist without the owner's activities) cannot avoid Social Security & Medicare taxes by making dividend distributions, but should actually be reporting wages paid to the owner in the amount of his/her profit. This in mind, can you suggest the best business type (S-corp, C-corp, LLC, Sole Proprietor) to keep my tax obligations down? Finally, can C-corporations legally declare in their articles that all shareholder expenses will be paid? If so, might this be my best option or would I then have to report the C-corp payments as personal income taxable as wages?
