Can you roll already earned income into new S-Corp?

Question

I have been working as an independent contractor this year. I am about to start an S-Corp to help with taxes.

Can I roll the income I have already earned this year into the S-Corp...or report it on my taxes for the S-Corp.

Answer 1

The money you made as independent contractor is now yours.  You can put as much as you want into the S-Corp as an equity contribution.  But it would remain self-employment income on your tax return.

You can't treat your self-employment income as income for the S-Corp.

Also, make sure you handle your payroll & payroll taxes correctly.  The penalties you can accrue for not handling that correctly can far outweigh any benefit of an S-Corp.  There's also quarterly tax reports to do, an extra income tax return (1120S), unemployment, corporate filings, etc.

I'd recommend consulting a tax pro before you file your corporate filings.  Becoming an S-Corp status isn't cost-effective for many independent contractors at all.  Or it might be cost-effective for you starting in 2009.  Or it might be cost-effective now, if you start out with all your ducks in a row.