MISSISSIPPI INSURANCE TEST COMPLETE QUESTIONS & ANSWERS (GRADED A).Buy Quality Materials!
S Corp
Greater than 2% owners NOT treated as an employee. Profit flows through to the owner, the owner pays taxes on this amount personally (on a form called a K-1). Premiums paid by the company are cons...
S Corp
Greater than 2% owners NOT treated as an employee. Profit flows through to the
owner, the owner pays taxes on this amount personally (on a form called a K-1).
Premiums paid by the company are considered income. The company does NOT file a
tax return- only shareholders. Because the owner is not an EE they may NOT
participate in cafeteria plans.
PC
Also known as Professional Corporation. The owner must be bound by a professional
degree. Ex. certified public accountant (CPA) or engineer. The owner is still treated as
an employee and the corporation pays taxes. The corporation is considered an
"individual" to the IRS.
C Corporation
The most common type of corporation, which is a legal business entity that offers limited
liability to all of its owners, who are called stockholders. Owners are considered
employees. The corporation pays taxes. The corporation is considered an "individual" to
the IRS.
Heaped Commissions
Commissions that are paid upfront. For ex. 60 - 80% year 1 and then 2% after that each
following year to retain employees. Generally applies for Work site plans
LLC
limited liability company. Profit flows through to the owner who is not considered an EE
and will pay taxes on a K-1. Because the owner is not an EE they may NOT participate
in cafeteria plans.
Partnership
Owners are NOT employees (no stock)
Types of companies where Owner is treated as an Employee
C Corp
PC or Professional Corporation
Types of companies where Owner is NOT treated as an Employee
S Corp (owners with greater than 2% ownership)
Partnership
LLC
What types of companies would issue a K-1 to shareholders?
S Corp
Partnership
LLC
Define 'Income'
Revenue - Eligible expenses
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