Is a S Corp needed when 1099 income is less than $50,000?

Question

i paid $900 to set up S Corp and pay approx $650 a year for tax attorney to do payroll and file.
I am a small one man S corp who is 1099ed and work for mortgage broker.
does this set up make sense or am i wasting my money??
Victor

Answer 1

Many entrepreneurs have two goals when choosing a structure for their business: 1) Protecting their personal assets from business claims (limited liability) and 2) having business profits "pass through" to the owners, who report them on their personal tax returns. Do these 2 goals make sense to you in terms of the type of business that you are in?

Answer 2

An S Corp is a good way to go to protect your personal assets and at the same time pass through your earnings similar to a partnership. Usually S Corps are set up because the shareholders expect the business to lose money in its early years so that the losses flow through to the shareholders. And they're not generally one man operations. If the business you are in isn't one that you might encounter significant liability from the businesses activities, and you don't intend on bringing in additional shareholders in the future, I don't see the need for the S Corp. Best of luck.