S Corp Formation/Opperation

[tigersanddawgs]

Hello! MS3 married to realtor here, as a realtor my wife is taxed purely as a 1099 worker so we are paying both sides of FICA on all of our income at this point. we are discussing creating an S corp to reduce this liability but have several questions. expected income 2021 around 100k (hopefully). we plan on taking a 50/50 split w2/distribution to keep the IRS happy.

1. Can you do this without an accountant and/or is it a dumb idea to do it without an accountant. i am fairly financially literate, do our taxes currently, and keep close tabs of our finance/investments.

2. Can i continue using online tax software (H&R, turbotax, ect...)

3. What are some good legal resources to summarize what is legally required of the S corp in terms of w2 paperwork, etc?

obviously the first year of doing a new financial structure like an S corp involves lots of learning on the way, but id like to learn in a way that doesn't involve making the IRS mad at me.

any other advice/input is welcome! ive learned when it comes to finance the questions you dont know to ask are the biggest deal.

Thanks!

[jhwkr542]

Because of the costs associated with setting up an s corp and doing taxes, at that low a level of income, it's not worth doing an s corp, especially with the qbi deduction.

[jfoxcpacfp]

Really don't recommend you try to DIY s-corp recordkeeping and filing - I have yet to see one prepared by a non-CPA that was correct (actually, plenty by CPAs have mistakes). However, agree with jhwkr542 that this w/n/b a good idea. You are adding payroll and an extra tax return, minimizing ability to contribute to retirement account, and also reducing your section 199a (qbi) passthrough deduction.