Can you help with S-corp taxes?

Question

Here is the actual question I was asked:

What will be the cost of business taxes, property taxes, school taxes, workers compensation, disability, unemployment taxes, federal taxes, state taxes, social security and Medicare taxes?

I have a hypothetical s-corp based in Minnesota for a school project.

Does anyone know the approximate percentages of these taxes so I can apply them to the net revenue in by budget? I have forecasted 3million in gross revenue.

Also, I was unable to find the exact amount of the Minnesota corporation franchise tax. If you have that, please let me know.

I do not need EXACT percetages, but I would like to be close.

Thank you in advance for any help.

Answer 1

OK FEDERAL UNEMPLOYMENT IS .08% OF THE FIRST 7000 OF EACH EMPLOYEE MEDICARE TAXES ARE 1.45% OF YOUR SALARIES PAID SOCIAL SECURITY IS 6.2% OF YOUR SALARIES PAID...STATE UMEMPLOY CAN VARY BUT IN TEXAS THE STARTING RATE IS 2.7% OF THE FIRST 9000 PAID TO EACH EMPLOYEE... THE FEDERAL TAXES ARE NOT RELEVANT IN AN S-CORP AS ALL PROFITS FLOW THROUGH TO THE SHAREHOLDERS IN THE FORM OF A K-1 WHERE IN TURN THEY REPORT AND PAY TAXES ON THEIR PERSONAL RETURN...YOU SHOULD BE ABLE TO GO TO THE MINNESOTA TAX ASSESSOR WEB SITE AND FIND OUT ABOUT PROPERTY TAX RATES FOR WHERE YOUR COMPANY IS THEORETICALLY BASED...
GOOD LUCK

Answer 2

For Federal tax purposes an S-corp is not taxed directly. Each shareholder reports their share of all income and expenses on their personal income tax returns. I don't know about Minnesota taxes. Property taxes in most states vary by county and are never related to revenue. Workers compensation, disability, unemployment, social security and medicare taxes are ALL based on payroll, not revenue.

Answer 3

Hi Colique,

If this is a school project, asking us does not achieve the purpose of your learning how to do research. Be careful, your teacher might find out about this & consider it cheating.

I'll be happy to narrow the field a little so you have a fighting chance.

S-Corps are not taxable at the Federal level. They "pass through" profit to the shareholders who include it on their personal income tax returns.

To get MN rates & Franchise tax amount go to

www.taxes.state.mn.us

Now, most of the rest of the taxes you listed are not based on revenue or profit but on gross payroll or another value. Use common sense and you'll get moat of them right..

To get employer payroll tax rates go to www.irs.gov and look up in Pub. 15 &15A.

The Minn. link should give you a link to the employment dept where you can look up rates for payroll taxes

Workers comp is insurance and unless it's provided by the state in exchange for a payroll tax, you will have to shop with a commercial lines insurance broker. If it is funded by a payroll tax in Minn. then the employment dept link will have it.

Property taxes only apply if the corp owns the property. If so, look up your county tax assessor website.

Good luck!

Hank