Author Topic: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?  (Read 2302 times)

Offline TheDroid

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #20 on: June 09, 2020, 07:23:10 AM »
Still eating popcorn for a day now.  ;D

Offline PlatinumGuy

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #21 on: June 09, 2020, 09:24:34 AM »
Thanks for this. Now how does all this apply to my owner distributions from the S-corp (K-1)? If the S-corp is domiciled in State X, and it's registered to do business in CA and files a CA return and pays franchise tax on the CA revenues.... are the owner distributions clear of CA personal income tax?
Yes. But you can pay yourself a reasonable wage to avoid that, etc.

You can look it up yourself, it's all there CA NY and IRS. Hint: Part of the answer is in your FTB link, I guess you never read it.
Or you could hire me to do the research for you but I would probably have to bill you at least 2-3 hours.
And of course unlike TurboTax, which actually knows the rule, you are the ignorant user who feeds TurboTax with wrong stuff and complain about the software. :P
Can you back up a single word you write?
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר יוסיף אהבה לתורה.״ - אורחות צדיקים

Offline TheDroid

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #22 on: June 09, 2020, 10:15:55 AM »
Still eating popcorn for a day now.  ;D

Almost ran out of popcorn.  ;D

Yes. But you can pay yourself a reasonable wage to avoid that, etc.
Can you back up a single word you write?

Wrong. This Owner distribution is still income from CA, therefore you still get CA taxed both W-2 and K-1.
And just to play along (with this wrong concept), you are saving 1.5% franchise tax by paying wage. That same wage you are trying to save 1.5% is taxed 10x more at around 15% for Medicare + Social Security. How smart is that?
Have you ever seen the K-1 from CA?

And yes I can back everything up. You just need give me a retainer for my time.
Hint: Your FTB link already says a lot. Before paying someone else to do work, maybe try reading it?
Hint: On the 100S there is column (e) there for a reason.

Offline PlatinumGuy

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #23 on: June 09, 2020, 11:19:03 AM »
you are saving 1.5% franchise tax by paying wage.
No, you're paying complete corporate income tax + personal income tax on a distribution since that is defined as CA source

And yes I can back everything up. You just need give me a retainer for my time.
Lol, you post a bunch of BS and ask people to pay you to prove that it's wrong? Exactly why people hate lawyers.

״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר יוסיף אהבה לתורה.״ - אורחות צדיקים

Offline TheDroid

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #24 on: June 09, 2020, 02:15:17 PM »
No, you're paying complete corporate income tax + personal income tax on a distribution since that is defined as CA source
So did I miss quote you???  :-X
I thought you said it isn't CA source. And you were saying to pay wages (personal income tax) to avoid that (corporate income tax)

Thanks for this. Now how does all this apply to my owner distributions from the S-corp (K-1)? If the S-corp is domiciled in State X, and it's registered to do business in CA and files a CA return and pays franchise tax on the CA revenues.... are the owner distributions clear of CA personal income tax?
Yes. But you can pay yourself a reasonable wage to avoid that, etc.

Lol, you post a bunch of BS and ask people to pay you to prove that it's wrong? Exactly why people hate lawyers.
Whatever you want to think, BS or not is up to you.
This isn't exactly why you should hate certain occupation, you're a great example of why people should get professional advice from certain occupation.
Hint: The issue at hand isn't lawyers but accountants or tax advisors. (Sorry if I correct you too much ;D)
 
And just a warning, that's not a good way for convincing the original poster and address the question.  ;)
I'm a solo lawyer with an S-Corp (registered in CA)

Offline PlatinumGuy

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #25 on: June 09, 2020, 02:30:21 PM »
Dividends & Corp income are CA source. Wages are not. Wages are always source of the physical location of the employee. Stop arguing & start proving
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר יוסיף אהבה לתורה.״ - אורחות צדיקים

Offline TheDroid

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #26 on: June 09, 2020, 10:53:10 PM »
Wages are always source of the physical location of the employee.
;D I hope you don't get audit

Stop arguing & start proving
Already provided a lot, but you didn't even read them. All in there!!!
And I repeat for the 3rd time

Hint: Your FTB link already says a lot. Before paying someone else to do work, maybe try reading it?
https://www.ftb.ca.gov/forms/2018/18_1031.pdf

Hint: On the 100S there is column (e) there for a reason.

You want more?
Stop arguing & start paying.

@LAX_Esq you can still PM me for no charge.  ;D

Offline PlatinumGuy

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #27 on: June 10, 2020, 01:38:03 AM »
;D I hope you don't get audit
Already provided a lot, but you didn't even read them. All in there!!!
And I repeat for the 3rd time

Hint: On the 100S there is column (e) there for a reason.


You want more?
Stop arguing & start paying.

@LAX_Esq you can still PM me for no charge.  ;D


The FTB link (Guidelines for Determining Resident Status) says very clearly

Quote
Wages and salaries have a source where the services are performed. Neither the location of the employer, where the payment is issued, nor your location when you receive payment affect the source of this income. Part-year residents include on Schedule CA (540NR), column E or Short Form 540NR, line 32 all wages and salaries earned while a resident, regardless of where the services were performed. Nonresidents include the income for services performed in California.
Example 1 You are a resident of New York working temporarily in California for a New York corporation.
Determination: Your income earned for services performed in California has a California source.

For W2 wages, source of income is defined only by physical presence of the employee. That is definitely the case according to the IRS with regards to foreign/US income, and to my knoweldge is the same in every jurisdiction in the world.

Do you have a shred of evidence to the contrary or do we need to pay you first?
« Last Edit: June 10, 2020, 02:30:01 AM by PlatinumGuy »
״וזה כלל גדול: שישנא אדם כל דבר שקר. וכל מה שיוסיף שנאה לדרכי השקר יוסיף אהבה לתורה.״ - אורחות צדיקים

Offline LAX_Esq

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Re: Solo Lawyer (S-Corp) Moving Out Of CA - Will I Avoid CA Taxes?
« Reply #28 on: December 09, 2020, 04:02:28 PM »
Following up on this, as we'll be moving at the beginning of next year. Any additional thoughts? Thank you!