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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Taxes
Expert: John Kirk, CPA
Date: 9/25/2008
Subject: Taxes
Question
Hello,
I recently started a catering company, S-Corp. My question is my employees are responsible for their own taxes which would make them contractors, correct? On my , however how much do I n need to set aside for each job they are sporadic, to ensure I cover myself at the end of the year. Example do an Oyster Roast and the total bill is say $3000.00. After I pay my help, and the food, what profit should I make and expect to set aside for taxes? I'm very new to the business side, thank you so much!
Mary
Answer
Your employees are employees, not contractors, you direct their activities, so by common law definition they are employees and you should be paying them wages subject to payroll taxes. As an employee of the S-corp you should also be withholding taxes on your salary. Put approximately 30% away in estimated taxes for quarterly net income.
Just curious, but why go through the trouble of forming a S-Corp if you are running it as a proprietorship?
John Kirk, CPA
www.johnkirkcpa.com
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