If like many homeowners you bought at the peak of the market and put nothing or next to nothing down, you may now owe more on your house than it’s worth. Underwater on your mortgage, you may desperately want to sell. But selling for less than you paid for your home could mean you will still owe money on a property you no longer own.
According to Time magazine, nearly one in five Americans owe more on their homes than the house is worth. Many Americans who need to refinance their homes are unable to do so because of the difference in what they owe and what their home is now worth.
Consider the alternatives
As addressed in my last post, profits of an S Corporation is not considered self-employed, meaning that the profits are not treated as self-employment income. Owners of S Corporations are required to pay themselves a reasonable salary like every other employee.
Business owners have the choice between several incarnations when deciding on the type of business they plan to operate. The choices often come down to decisions between basic liability and protecting your personal resources.
Above all, tax considerations are the most common reason why small business owners choose to incorporate. Let’s talk about S corporations.
Last week, I focused on the potential liability related to the choice of entity chosen to operate a small business. This week I’ll review how each business structure is taxed and how that choice will impact whether to remain a sole proprietorship, or if the long-term interests of the company are better served by the creation of some type of corporation.