A corporation is a distinct legal entity that pays workers for their services. Corporate shareholders who operate the business are compensated just like any employees. This permits the corporation to provide employee benefit plans to the owner. An independent contractor taxed on income reported by Form 1099 is not entitled to establish employee benefit plans […]
Business owners have discovered that selecting S corporation tax status results in business profit not incurring self-employment taxes—the employer and employee shares of Social Security and Medicare.