Employer Wants to 1099 Contractor, not Contractor's S Corporation

[jk]

It would have been nice if OP had told us in the beginning why they would not make payment to a company and only wanted to/could pay OP personally. In fact, it appears OP knew exactly why they would not pay to his company but simply chose to not disclose that in the beginning. That reeks of shady to me.

[danmassi]

It would have been nice if OP had told us in the beginning why they would not make payment to a company and only wanted to/could pay OP personally. In fact, it appears OP knew exactly why they would not pay to his company but simply chose to not disclose that in the beginning. That reeks of shady to me.

Desiring not to disclose too much intricate personal financial information is not the same as being shady.

FINRA has no legal right to deny me the choice of the best tax structure for me. In an earlier suggestion/example where $150,000 less $80,000 in expenses nets $70,000 on Schedule C subject to SE tax is exactly my point here. It is probably something I can swallow, especially in order to avoid audits and other costly problems, but it frankly ticks me off that the enforcement of an unrelated regulation would deny me the S-Corp benefit of taking a salary and then realizing a dividend that does not have to pay payroll taxes. Yes, that is PRECISELY what I am trying to do, minimize my taxes. In this example, I would probably do something akin to taking a $50,000 salary and a $20,000 dividend, as is perfectly acceptable with an S-Corp, but to HAVE to account for this income entirely as wages subject to SE tax is not right, and not the purview of FINRA to dictate. I am looking for a way to be in compliance with the regulatory (really enforcement) framework FINRA has conjured up yet still capture the same tax benefits afforded to anyone running their own business. I don't see why this is shady. It is these sort of situations and question that keep CPAs and lawyers in business.

[jk]

FINRA has no legal right to deny me the choice of the best tax structure for me.

well, according to you, it is not possible for them to do what you want.

- I am in the securities business. FINRA insists on a broker dealer writing checks (for securities related business) only to individuals who themselves are "registered", and not to a "company", unless that company is also a registered broker-dealer (which I don't intend to do - that actually conflicts with other FINRA regulations, of course).

so, since they cannot pay your company legally, they pay you.

Since you already knew it was illegal for them to pay your company and you refused to disclose that at the beginning of this thread and allowed the thread to continue in an attempt to find some loophole or tax dodge, I see that as shady.

[Bubba Jimmy]

You are under serious misconceptions at to what your rights and what the rights of others are. You have every right to work only through your S corporation, rejecting all offers of work as an independent contractor. Other companies have every right to employ only self-employed independent contractors.

You also don't seem to understand what the IRS requires in terms of salary from an S corporation. It is highly unlikely that the IRS would consider a large "dividend" to be legitimate if you are the only person providing any services to the S corp. Just because people get away with things doesn't mean those things will stand if you come under IRS scrutiny. I have personally been involved in precisely the situation where a lone individual worked for an hourly rate through an S corp and tried to claim that 50% of what they received from the corporation was a "return on investment" when the only investment was in the state corporation filing fees and a personal computer. Guess what? The accuracy related penalties were significant in addition to a large tax liability.

Who told you it is "perfectly acceptable" to do this? And why do you think "employers" reject your scheme? That's right, if your sham corporation fails to pass muster with the IRS, they can go after the employer for the taxes they determined you should have paid. But you think it's your right? Okay, you just go and tell them your "rights" all day long.