Books/Advice for new one-man S Corp?

Based on your experience, do you have any advice, or book recommendations for how to run a one man S corporation?

The S Corp will be a home based business that runs a website selling tangible products. I want to use Quickbooks (will hire a Pro Advisor to get it set up for me)

I’m young, and have some sole proprietor experience, but am just looking to bone up on the record/bookkeeping and other aspects.

Your main headache will be dealing with payroll stuff. You have to pay yourself a salary, and you have to pay payroll taxes as your own employer, regularly through the year.

That’s the main advantage of an LLC for a single person business in my opinion. A single member LLC does not have to handle payroll. The tradeoff is that all income is subject to self-employment tax at the end of the year instead, rather than just a self-set salary (where distributions from the S corp beyond the salary wouldn’t be subject to self-employment tax).

That and an LLC doesn’t have to keep as many records. How the business is managed is less formal.

Whatever accountant you’re going to see to set up your Quickbooks can explain it in more detail I’m sure.

LLC’s are simpler, yea, but an s-corp isn’t too much trouble either. Payroll is a pain but it can bring some benefits to you depending on your business. As a general rule, the more revenue you bring in the more benefits you’ll get, and if you aren’t planning on making much an LLC can be a good start. Choosing a small business entity is primarily about taxes and optimizing profit/benefits, so a CPA who is familiar with your scenario should be able to recommend. There are also some variations between states such as fees, etc.

I have an s-Corp domiciled in Nevada and in that state you can do a payroll run once per year if the corp is owner-only - you just file zeros on your 941’s for the first 3 quarters then make it work out perfectly at the last quarter - we just reclassify draws from the company as payroll or dividends or whatever makes your taxes work.

A good accountant is a must - if they will help you get setup you should sail through it. Check NOLO press for excellent resources about running a corp.

How can you do payroll once per year; I mean, how do you pay yourself throughout the year for mortgage, groceries, etc? Isn’t making draws from the corporation a bad thing because it gives the appearance that it’s an individual running the show?

See this:
“And, because the IRS requires S-Corps to pay owners and share holders who work as a corporate officer, on a W-2 with income subject to FICA. An S-corp where no share holders or the single owner, is getting a W-2 is a red flag.”
http://www.justanswer.com/questions/1yujj-one-man-s-corp-made-mistake

Well, l I trust my attorney and CPA on this one. I take draws (legal, ethical) and at the end of the year I reclassify according to how the numbers work out (legal, ethical).

I DO pay myself a very reasonable salary and issue myself a w2 at the end of the year (legal, ethical) and we withhold FICA and everything else.

I have never heard that an s-corp that doesn’t issue w2’s is red flag. You may have read that sentence wrong: “S-corp where NO share holders or the single owner, is getting a W-2 is a red flag. (you are still subject to audit on the 2007 return)”