Campervan for locums

[spiritrider]

A couple of things you should know:

1. All W-2 employers are required to deduct the Social Security (SS) component of FICA taxes up to the SS maximum taxable earnings (MTE)(2023 = $160,200). While an individual can received a credit on their tax return for the 6.2% excess SS employee share. The 6.2% excess SS employer share is not recoverable. Your S-Corp will be costing you 6.2% on excess SS taxes to save 2.9% - 3.8% Medicare taxes on distributions. The S-Corp is quite likely costing you more in net effective FICA taxes than you would have paid in SE taxes.
2. Whether you use Section 179, bonus depreciation and/or standard depreciation. Any failure to maintain > 50% business use over the full six years, results in prorata recapture of front-loaded amounts subject to ordinary income tax.

[Tim]

A couple of things you should know:

1. All W-2 employers are required to deduct the Social Security (SS) component of FICA taxes up to the SS maximum taxable earnings (MTE)(2023 = $160,200). While an individual can received a credit on their tax return for the 6.2% excess SS employee share. The 6.2% excess SS employer share is not recoverable. Your S-Corp will be costing you 6.2% on excess SS taxes to save 2.9% - 3.8% Medicare taxes on distributions. The S-Corp is quite likely costing you more in net effective FICA taxes than you would have paid in SE taxes.
2. Whether you use Section 179, bonus depreciation and/or standard depreciation. Any failure to maintain > 50% business use over the full six years, results in prorata recapture of front-loaded amounts subject to ordinary income tax.

The mileage and use for the w-2 is going to be problematic. That will come out of whatever the annual deduction allowed might be.

"Any failure to maintain > 50% business use over the full six years, results in prorata recapture of front-loaded amounts subject to ordinary income tax."
Six years is a long long time working three different jobs. I would figure out not only what is deductible bout how to get out of it.

[Atomec]

Glad you have a permanent home. As jacoavlu intimated, I wouldn’t recommend repeating that last sentence in public.

You really really need to be working with an experienced CPA. So many parts to this plan. I realize you’re just trying to get an idea of what you can expect but I think the sooner you can start getting advice specific to your situation, the better you can make this work for you and, at least as important, demonstrate that you have the backup in case of an audit.

what I mean is that I am planning on buying the thing for locums whether there is a tax benefit or not. I just suspect there is a benefit. I'll ask my accountant.