S-Corporation in NYC

Jan 27, 2008 3 Replies
P

Hi,



I am a sole owner/shareholder of an S-corporation incorporated in Washington State. I am thinking about taking a contract job in NYC and would temporarily move there.



Let's assume that corporation income from NYC work is $200k/year. I would like my corporation to rent me an apartment in NYC for this temporary assignment and I can get reimbursed for its cost. If the apartment is $40k/year that leaves net income of $160k which I can issue myself as salary. I would have to pay FICA, FUTA, NYC state and city, as well as federal income tax.



Since FICA stops at ~$90k I would think this would be a better way to go. Since net income for corporation after expenses (apartment) and my salary would be 0, I would think there would be no tax to pay on corporate level. I do not think NYC could double tax me, or they could but tax basis would be 0, correct?



Please let me know if I am close or completely off in my calculations/ assumptions. Thanks


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E

S corps do not pay income tax. It's all tax directly to you. The travel (and living) expenses are virtually all deductible as long as you have retained your WA home (ujnless your "employer" reimburses you for them).. "temporary" must be expected to be less than 1 year.

ed

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P

I agree with federal income tax flowing through to the shareholders. And in a case of NY state the same is true. However, I think that NY City does not recognize S Corporation status and corporations have to pay city tax of 8.85% on net income. I am just wandering what is net income defined as and if my salary would be excluded from it. I know I would have to pay ~3.5% NYC income tax on my salary but that sure beats 8.85%. Thanks

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B

NYC does not recognize S corp status. If you move here, you would quite likely acquire residency status in NYC. You could be considered a resident of both states.

You must be a comedian if you think that a taxing jurisdiction would avoid double taxation of the same income.

If you operate your business as an unincorporated entity, NYC has the UBT (unincorporated business tax)

You should find a CPA/tax advisor with NYS/NYC experience (I qualify- but you don't have to call me)

___________________________________

-----> real address on hobokeni or hobokenx

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