I did considered S-Corp for while, but I discovered thats SCREAMING TO BE AUDITED. S-Corps can save lots of money, and as of late, have been increasingly targeted by the IRS. It's due to a loophole regarding dividend payments and "reasonable" salaries.

Quote from: lisafx on October 19, 2009, 11:16

I am an S-Corp so I do have to actually file a quarterly tax return too, but if you aren't incorporated you don't have to bother with that.  

This is actually not true. ANYONE, even sole proprietors like myself, or just plain old individuals who earn enough non-withheld money in one fiscal year that would require paying greater than $1,000 in taxes on, is required to pay quarterly taxes. No one escapes it! It just so happens that most people don't have to worry about that, because you have to earn around $10,000 in extra non-withheld income per year, and many hobby shooters never reach that level.

As for the stock photography - I did considered S-Corp for while, but I discovered thats SCREAMING TO BE AUDITED. S-Corps can save lots of money, and as of late, have been increasingly targeted by the IRS. It's due to a loophole regarding dividend payments and "reasonable" salaries.

Quote from: cardmaverick on October 19, 2009, 16:16

Quote from: lisafx on October 19, 2009, 11:16

I am an S-Corp so I do have to actually file a quarterly tax return too, but if you aren't incorporated you don't have to bother with that. 

This is actually not true. ANYONE, even sole proprietors like myself, or just plain old individuals who earn enough non-withheld money in one fiscal year that would require paying greater than $1,000 in taxes on, is required to pay quarterly taxes. No one escapes it! It just so happens that most people don't have to worry about that, because you have to earn around $10,000 in extra non-withheld income per year, and many hobby shooters never reach that level.

Actually, you misread what I wrote. 

I said I PAID quarterly taxes (on 1040ES) as a sole proprietor.  But a sole proprietor is not required to file a quarterly TAX RETURN (form 941).  Sending in a quarterly payment with a payment coupon is not the same thing as being required to file an actual tax return.

Again, I would advise anyone reading this to consult a professional accountant.  You should not rely on any of the self-proclaimed experts on this forum (myself included).

Well, when I researched S-corp's I found that after the John Edwards thing happened, S-Corp audits across the board jumped up, I can't remember how high, but I think it set some records... Paying yourself a salary of "$1,000" is a sure fire way to be targeted. What kills you the most is the HIGHLY opinionated definition of a "reasonable salary". This is the famous S-corp loophole - what is reasonable? What you think is reasonable pay is all you get hit up for on self employment taxes. Another thing to consider is overall income you pull in. $50,000 might be fine if you made $100,000 and had lots of expenses, and took a $5,000 dividend payment - but it might not be viewed by a judge as reasonable enough if your business did say $1 Million in business and you took a six figure dividend payment.