filmmaker looking to set up an s corp?

[noplaceliketheroad]

Hello all! DH and I are filmmakers in need of some advice. DH is finally feeling established in his career and I'm just starting out. So he's the money maker for now.

We've been advised in the past that setting up an s-crop isn't worth it until you reach the $250,000 income per year mark, and DH is at that now. We're currently paying about 65% of his income to taxes and agent fee (10%), and would love to be able to lower that, especially since work travel expenses / equipment purchases eat a chunk out of the rest. We usually get a nice tax return, but would prefer to not go that route anymore. A lot of his jobs are out of state so CA takes out a resident tax as well as state and local taxes from wherever he is working. It seems like the amount of taxes we pay is just getting crazier and crazier per check...

Would we use a CPA to set this up? If so, any recommendations? And do they need to be California based since that's our resident state? Or can they be located anywhere? Do we even want the s corp set up in CA? We're currently on the east coast through the end of the year for a gig for DH (yay to his current gig paying for half a year of rent!!)

I'm also trying to research what are our best options are for funding some retirement accounts. He has a union pension plan that his employers contribute to. His jobs are about 25% 1099 jobs and 75% through a payroll company where they consider him a short term hire. So there aren't any 401(k)s avail to us that I know about. Would ROTH or Traditional IRA be our best choice given his income? Are there other options?

For the s-corp, I will also be an employee of the corp.

Any advice is appreciated. Let me know if I can provide any additional details.

Thanks!

[Tetsuya Hondo]

Talk to an accountant. I would choose someone in your state of residence since they'll be most familiar with your state's tax laws.

You don't need to make anywhere near $250k for an S-Corp to be beneficial. And if you're really paying 55% of your income in taxes, and you don't live in Denmark, then you really, really need a good accountant.

With an S-Corp you can set up a solo 401k and stash $53k a year in retirement.

One kink in these plans though is that it sounds like 75% is coming from W-2 work, so that portion probably will not be able to flow through an S-Corp. But I'm not an accountant, so you need to talk it through with them. Speaking of, did I mentioned that you need to talk to an accountant?

[noplaceliketheroad]

Thanks for the info, Tetsuya! And haha, yes, I think we need to talk to an accountant asap :)

Anyone have a recommendation for an accountant in the Los Angeles area?