It's the law: Athletic officials need a license to call

[Mark Padgett]

Actually, it doesn't bother me at all. I have an S-corp and all my referee income is paid to the corporation. I pay a state corporations tax and a city home occupation permit fee. It's well worth it. If you have quite a bit of referee income, I suggest you speak with your tax professional.

[bob jenkins]

Originally Posted by Mark Padgett

Actually, it doesn't bother me at all. I have an S-corp and all my referee income is paid to the corporation. I pay a state corporations tax and a city home occupation permit fee. It's well worth it. If you have quite a bit of referee income, I suggest you speak with your tax professional.

Can you provide some more details? What income can you defer / expenses can you take under the S-Corp that you can't take on schedule C?

[Skarecrow]

I have had a S Corp for years, and really the only real benefit I find is maybe some protection via the corporation from personal losses should there be a suit of any kind....I have to pay employer's share of W-2 taxes, Withholdings, Medicare, FICA...all of the normal....as a Schedule C, you have to pay your SE taxes....my accountant tells me there is a substantial savings to the S Corp, but I really haven't seen it....I THINK!

You need a good interview with your tax man to decide what to do...I keep thinking of going back to the Schedule C, but I do like it that he does my books....

[jdw3018]

Originally Posted by Skarecrow

I have had a S Corp for years, and really the only real benefit I find is maybe some protection via the corporation from personal losses should there be a suit of any kind....I have to pay employer's share of W-2 taxes, Withholdings, Medicare, FICA...all of the normal....as a Schedule C, you have to pay your SE taxes....my accountant tells me there is a substantial savings to the S Corp, but I really haven't seen it....I THINK!

You need a good interview with your tax man to decide what to do...I keep thinking of going back to the Schedule C, but I do like it that he does my books....

With an S-Corp you have to pay yourself a salary, and the taxes on that is no different than the taxes for a sole proprietorship (I mean, they're different, but they add up to the same amount in bottom line terms to you).

However, with an S-Corp you don't have to take your entire income as salary, and any income taken at the end of the year beyond that salary is treated as a dividend and taxed as such. That's where the savings come in.

In my opinion, to take advantage of the S-Corp (which includes additional fees and is a more complicated filing process) you have to have a decent amount of income. But it definitely pays to consult your accountant.

[bob jenkins]

Originally Posted by jdw3018

With an S-Corp you have to pay yourself a salary, and the taxes on that is no different than the taxes for a sole proprietorship (I mean, they're different, but they add up to the same amount in bottom line terms to you).

However, with an S-Corp you don't have to take your entire income as salary, and any income taken at the end of the year beyond that salary is treated as a dividend and taxed as such. That's where the savings come in.

In my opinion, to take advantage of the S-Corp (which includes additional fees and is a more complicated filing process) you have to have a decent amount of income. But it definitely pays to consult your accountant.

But, dividends are taxed at the same rate as earned income, I think.

[BillyMac]

Originally Posted by bob jenkins

But, dividends are taxed at the same rate as earned income, I think.

Are your referring to federal, state, county, or city, or borough taxes?

[Adam]

Dividends are currently taxed at lower rates than "regular" income. Dividends are currently taxed at 15% (5% for those in the lowest two tax brackets).

These rates are set to expire (and thus increase to a more complex and higher system) mid-season this year (12-31-08) unless an extension was passed that I'm not aware of.

edited to add: the changes to this have been complicated, I believe for 2008 the rate may be 0% for those in the bottom two tax brackets.

[jdw3018]

Originally Posted by bob jenkins

But, dividends are taxed at the same rate as earned income, I think.

Aside from the current advantage of a lower tax rate, the other advantage is that you won't owe self employment taxes on that portion of the income.

That's where the big savings come in.

[Kingsman1288]

Oh man. I remember when this email started going around in the association. Some people shrugged it off, some ran out and bought their licence. I haven't done anything yet.

What really sucks is that each city requires you to have a licence and each city has their own fee for a licence. We work all over San Diego county which I believe has 12 cities in it, if not more. 12 times whatever the fee is equals a lot of money.

I am not buying one. I think it's ridiculous to not enforce this law for years, and then just becuase times are tight start to enforce it.

[Skarecrow]

Originally Posted by jdw3018

With an S-Corp you have to pay yourself a salary, and the taxes on that is no different than the taxes for a sole proprietorship (I mean, they're different, but they add up to the same amount in bottom line terms to you).

However, with an S-Corp you don't have to take your entire income as salary, and any income taken at the end of the year beyond that salary is treated as a dividend and taxed as such. That's where the savings come in.

In my opinion, to take advantage of the S-Corp (which includes additional fees and is a more complicated filing process) you have to have a decent amount of income. But it definitely pays to consult your accountant.

Agreed.....I take about 60 as a salary and the other 40 as a dividend.....works out ok, I hope

[jdw3018]

Originally Posted by Skarecrow

Agreed.....I take about 60 as a salary and the other 40 as a dividend.....works out ok, I hope

I operate my own business in my "regular" profession as well, so the S-Corp is the best way for me to go...I can't imagine it would be worth it for me to do it only for my officiating income.

Now, if I were officiating multiple sports all year round, high school, youth leagues, adult leagues, etc., or was heavy into college officiating where the income became substantial, then I could see it.

But, for the $2-3,000 minus expenses I currently make from officiating, it alone wouldn't be worth the extra bookkeeping hassles and fees.

[Mark Padgett]

Originally Posted by jdw3018

I operate my own business in my "regular" profession as well, so the S-Corp is the best way for me to go...

Me too.

[BillyMac]

Originally Posted by Skarecrow

Agreed.....I take about 60 as a salary and the other 40 as a dividend.....works out ok, I hope

Just basketball? $100,00.00? You must work some schedule.

[Camron Rust]

Originally Posted by BillyMac

Just basketball? $100,00.00? You must work some schedule.

He was talking in Yen.

[Skarecrow]

Originally Posted by BillyMac

Just basketball? $100,00.00? You must work some schedule.

100%....60% and 40%....In the last posting, I was lazy and couldn't find the % button.....I would love to make $100K reffing......but my other business is Security Consulting....I am doing a Schedule C for the reffing, because I can't mix my two different skill sets in my Sub S......