Is self employment better than joining a limited company in terms of tax?

[SlightlyLost]

I'm a self employed tiler in California who earns around $87,500.

I wonder if switching to a limited company is more tax efficient than staying self employed.

Key concerns are how to pay themselves from the company, if it's worth the added admin, and how CIS tax deductions work with a limited company structure.

I'm hoping that people here can help me, here's my questions:

Is a limited company better for tax at this income level?

Can CIS deductions only be reclaimed through monthly payroll, making corporation tax less appealing?

If the company earns $87,500 and they take a ~$15,000 salary plus ~$10,000 in dividends three times a year (total ~$45,000), how much corporation tax will be owed, considering tax deducted at source?

I'm really worried about double taxation.

 

[DebitDude]

If you set up a limitted company you'll pay corporation tax on your profits instead of income tax like a sole trader and corporation tax is typically lower.How you take money out can change and the best way really depends on your situatoin.It's a good idea to talk to an accountant to see what works best for you

 

[Economist_]

Have you spoken with a tax advisor about how your specific CIS deductions would flow through a limited company structure? I'm wondering how much you'd actually reclaim and whether it offsets the extra admin and corporation tax

 

[BarkyMcbark]

@SlightlyLost I agree, I think you need to sit down with a professional. Find a CPA (Certified Public Accountant) or a tax attorney in California who specializes in small businesses.
They can analyze your income, your expenses, and your specific situation to tell you exactly how much you can save by switching to an LLC taxed as an S-Corp, and they'll help you navigate the paperwork so you don't have to worry about the admin