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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Jon Tara who wrote (24532)	1/13/2005 11:03:21 AM
From: SeaViewer	Read Replies (1) \| Respond to of 110194

If you set up an LLC, you get some real flexibility. You can arrange for part of your income to be self-employment income (and thus making you eligible for the Defined Benefit Plan) and any excess beyond what is needed for that as Ordinary Income (and thus not pay Self Employment Tax on it.) Salary or guaranteed payments are self-employment income. Distributions which are not guaranteed payments are Ordinary Income. You can slice it whichever way works out best for you. Jon, So people don't need to pay SS tax on Ordinary Income, don't they?

To: Jon Tara who wrote (24532)	1/13/2005 12:16:29 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

re: TX, Cheaper for income tax, but not for property tax. It's at least double the California rates. But, for now at least, the real estate prices are lower. houses in CA cost around three times as much as houses in TX, on average. CA property tax is much lower for long-time owners, but for recent buyers i doubt it is much different than TX on a percentage basis, and probably much higher on an absolute basis when you factor in the 3x higher housing cost. having said that, there is a widespread recognition that property taxes in TX are quite burdensome. i think they have peaked and will be coming down. there was an article in the local paper today, which said the legislators and governor are working on a plan which would basically replace district-level school property taxes with a (considerably lower) state-level property tax. the loss in revenues will be made up for by expanding the base of business franchise taxees to cover all businesses other than sole proprietorships. i think the lower property taxes will propbably be a help to Texas real estate.