>True. I set up my chapter S through a lawyer and accountant
>earlier this year. I would have put it off a bit, but at
>that time I didnt know I would have to wait to make my
>appearance in the expedite biz.
>
>Here is my situation in a nut shell.
>
>Part 1. I will be getting a disability annuity from my
>current position. But, to keep that...I cannot make more
>than 80% of what I am making in this position at the time of
>my departure.
>
>Part 2. I formed a chapter S corp. Planned on owning my
>own truck. But, will atleast start out driving for somebody
>else. Even though I wont own the truck...I can still be a
>1099 as you say. Instead of being hired as an individual,
>they will have a contract with my chapter S corp to provide
>"driver services". That way the income flows to my chapter
>S instead of me directly. I claim what is = to 80% of my
>current income. Money in the chapter S that is in excess
>(after my salary and expenses) can be spent on anything I
>want it to be spent on. Not all of it will be tax
>deductable. But, a corp can spend its money however it
>wants.
>
>Let me know your thoughts.
While your Sub S Corp is properly established with an attorney's help, that in no way insulates you from the scrutiny of the insurance company that is paying your disability benefits. There is a legal concept called "Piercing the Corporate Veil." Look into it before proceeding down your announced path. Insurance companies have entire departments and highly-skilled lawyers dedicated to minimizing fraudluant claims. Your Sub S combined with activity that indicates no disability will be no match for them.
Just now editing my post after talking with my wife, Diane. She used to be an insurance company attorney tasked partly with protecting the company from fraudulant claims. Now before my critics rise to paint her with the evil corporate brush, kindly note that one of the most rewarding parts of her work was paying legitimate claims quickly and without dispute. She had built up enough credibility with her managers that when she said "pay it" they did. The sad part was the unbelievable number of fraudluant claims that had to be dealt with.
Anyway, I'm not saying you are making a fraudulant claim. So far, you have not done so. Diane tells me that if your insurance company discovers that you are generating more money than the amount permitted by your annuity agreement, they won't have to go to court. They will simply use that fact as the basis for cutting or denying your benefits outright. It's not about how the money is categorized or earned, it is about whether you are disabled or not. If you are out there producing more money than you are allowed under your agreement, the presumption will be that you are no longer disabled. And based on what you report here, it sounds like that presumption would be true.
