General Questions For Anyone That Knows About Business Law.
Okay, so I was watching a video, about a man who owns his own business, in child support court. He files his own taxes as owner of the business showing he made less than $25,000 for the year, but from an outsiders view it appears he makes well above that.
Now my questions are
If he owns the business, does he file taxes for the business and for himself separately? Or is it a single form until you have a certain number of employees.
If he does file two forms separately, can his business make $500,000 in profit for the year but on their books pay him a salary of $24,000 legally allowing him to file a $24,000 earned income on his taxes, while technically he, as the owner of the business, has full control and access the the remaining $476,000.
And would that be better to do? Strictly from a financial point of view. To better clarify, would you making $500,000 in salary from your company and the company making $0 be more or less taxes. I would assume the tax percent/available tax breaks change from personal income to company income.
If he is able to file separately, and keep his earned income low ($24,000) so that the ex doesn’t get a bigger check. (He already spent thousands each month on everything for the kids. She wanted money for her.) Would he as the owner get to decide what the company uses it’s funds for as long as all taxes and everything is paid? Like could he, as owner decide that every employee gets fed 3 times a day wherever they want, gets a new company vehicle, all of their childrens daycare, medical bills and school tuition paid for, and rent for an apartment all on the company’s dime. And him be the only employee. Basically allowing him to pay for all his needs but still maintaining a low earned income. Or would all those expenses count towards his earned income. Kinda like little bonus’ but they have to be spent on certain things.
Thank you the help in advance!
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