Owner benefit against company profits

[Everhopefull]

Can someone please tell me which is better to have, a higher owner benefit or company profit? Does it make a difference.
Perhaps it should be split between the two.
I am looking at this from a visa renewal point of view, rather than the tax mans point of view.
Or have I got it completely wrong when reading the report and they are one in the same.

Thanks

[peter gold]

Owner benefit includes more than the profit so best to have the highest owner benefit for a renewal

[JulieC]

By owner benefit I asssume you mean wages paid to yourself on a W-2, perhaps better called owner draw. However, that is not strictly owner benefit, they do add company profit on to that plus any benefits taken in kind. then look at the total figure in assessing marginality etc. So a split should be OK.

[McSporran]

I think Peter's right - the owner benefit can be made up of many things:

Mine included line items from my tax return like:
Net Profit
Salary paid to me (Owner compensation)
Depreciation
Amortization
Interest paid
Dues & Subscriptions etc

While I tried to keep mine as "clean" as possible...i.e. not including fancy add backs that could be looked on as debatable, I think its important to include all relevant ones to make the numbers truely represent your owner benefit.

Hope this helps

[Everhopefull]

Thanks for the information.
I have a clearer understanding of this now,
I was getting the W-2 income and company profit confused. So that is now cleared up.

My next question is what is the lowest level the Embassy will accept.
Whilst there is probably no set figure, there must be a ball park one.
I am sure I have seen $60K PA as a guide.
Any clues anyone.

Thanks

[Phoenix]

The latest that we have heard, to satisfy immigration for E2 visa application or renewal is that you should be earning, in owner benefit, at least the median income for a family of 4 in the area where the business is held. Depending where you are, it may be around 40 - 50k, although in this economy it will surely be lower when they redo the figures! That is where a lot of people go wrong, cos they try to 'declare' less income for tax purposes but it then goes against them when applying/renewing visas.

[McSporran]

The latest that we have heard, to satisfy immigration for E2 visa application or renewal is that you should be earning, in owner benefit, at least the median income for a family of 4 in the area where the business is held. Depending where you are, it may be around 40 - 50k, although in this economy it will surely be lower when they redo the figures! That is where a lot of people go wrong, cos they try to 'declare' less income for tax purposes but it then goes against them when applying/renewing visas.

I agree with this - I used the median family income in both Polk County (where I live) and Houston TX, where some of my company operated from...got these figures from the government census data.

Hope this helps.

[davidmartin_uk]

As we all know a family can not live on $40,000 a yr and have proper health insurance, or any sort of standard of living. You have then got to ask yourself - whats the point of living here????

Dave

[anniefromessex]

Dave, you have hit the nail on the head in all honesty. Apart from that, even though times are hard here in England at least help is at hand in many ways. We have been saying that we don't really know how we would have survived over there in this day and age, especially with the Health Care factor which can be as much as paying a Mortgage per month, luckily we didn't/don't have a Mortgage over there but my heart goes out to people who do. Having said that, perhaps just being there is enough for some and they will do everything in their power to stay - their prerogative at the end of the day and good luck to them.

Phoenix, you are absolutely right in what you say regarding declaring less for tax purposes. There's no point in doing that when push comes to shove - you lose out in immigration scenarios.

Love Anniexxx

[Kriz1]

60k min is about right if you just wish for a normal life..and that is with a small home loan and small car payment..and very few out goings...

[anniefromessex]

Kriz, you say 60k minimum which is I suppose equivalent to 30k over here which I know many many people do not earn here, but still manage to live and have quite a decent lifestyle - obviously life over there is no longer cheap.

Love Anniexxx

[Kriz1]

Its not cheap where I live....I also think you need spare money you may not need in the UK when you move to a new country..for the most part people say they move for a better life..to me that means not just getting by..but having things or doing things you would not think of doing if you had stayed in the UK..I remember someone saying on another site you needed about $150k in the US...but we do well enough on a lot less then that and I think we have an OK life...

[Susie]

i met with Matt Bell who is a member of our site. He is a cpa. we were discussing the various types of corporations LLC , INC, S and C corporations, just so confusing

Hopefully he can explain the difference here for us, and if he misses this thread I will call him

[McSporran]

Sorry ladies - but I think you're missing what was asked here....I think Everhopeful was asking what was needed by the embassy...not what do we think you actually need to live on, or what type of corporation you need to have?

Hence my answer re census data! - sorry if this wasnt what you were Everhopeful?.

I've heard alot of talk re $60 as to what the embassy want to see...but I can tell you that I know of at least 2 people who just got renewals who were showing owner benefits of much less than that....so I wouldn't get too hung up on that number as far as your case goes.

[chris]

Good idea about the census data plus anywhere else you can get 'local' data on income levels. Just remember though that this sort of data is history on the day it is released. The whole page on incomes has changed considerably in the past year downwards for everybody. Census data will not show that yet.
What you can live on is a totally subjective thing. For many Americans eating out every night is the norm, cos they are too lazy to cook. Many Brits follow that trend, so their food outgoings are not the norm is the normal sense.
I guess what a lot have these days are champagne tastes on a beer budget!

[Kriz1]

Its not just what will get you into the country its about what you need to live on..I remember having this chat on another forum..and people were coming here with such small amounts to live on they were going home within months sometimes...

I could stay at home in the UK and watch TV every night without all the visa problems..so having enough to live on and that bit more for extra's is what I rec most people do...and not everyone moves to FL where it is a little cheaper..

[McSporran]

Kriz & Chris - I agree totally with you on what you actually need to live on...but the original question wasnt about what you actually need, it was about what do the embassy look at (totally different things - in my experience)...hence my answer re the census.

So if anyone is looking at this thread re what do you actually need - dont use the figures from the census as they will be way too low....but if you are preparing a case, the census will give you some "external evidence" on which you can base an "owner benefit, level to show youare making "more than a living income""...hope this clears up what I'm trying to say!:)

[anniefromessex]

McSporran, sorry totally got lost along the way. Still makes me sick though if I am honest, because what they want from "us" is totally different to what the average American Joe has to provide - why are we soooo special?!!!!

Love Anniexxx

[InnVic]

you do have to make sure that the 'owner benefit' is tangible though (salary?) As we own a B&B, our home, utilities, auto, even food insurance etc.. are all benefits, but they are included in the company accounts, while we factored these out on a separate sheet to demonstrate this, the embassy were only interested in the bottom line on the tax return.

[bizboots]

I would like to know where all these figures come from , like 60K and what ever, as it is not written anywhere in the E2 law.We never made that and got 5 year Visa renewls , what we noticed it that the last time we only got 2 years as on "paper" our PROFIT went down, due to tax write offs, and they have no clue in how to read tax returns( this in Frankfurt)



Sorry ladies - but I think you're missing what was asked here....I think Everhopeful was asking what was needed by the embassy...not what do we think you actually need to live on, or what type of corporation you need to have?

Hence my answer re census data! - sorry if this wasnt what you were Everhopeful?.

I've heard alot of talk re $60 as to what the embassy want to see...but I can tell you that I know of at least 2 people who just got renewals who were showing owner benefits of much less than that....so I wouldn't get too hung up on that number as far as your case goes.

[McSporran]

I would like to know where all these figures come from , like 60K and what ever, as it is not written anywhere in the E2 law.We never made that and got 5 year Visa renewls , what we noticed it that the last time we only got 2 years as on "paper" our PROFIT went down, due to tax write offs, and they have no clue in how to read tax returns( this in Frankfurt)

I agree totally on this...I had to walk them through my accounts...but then I guess I SHOULD know my business better than they do!:p

[Kriz1]

The 60k thing started years ago on another forum..it was to do with the amount you need to live on more than anything else..its just gone into visa folklore

[bizboots]

That is what I though, so people do not get hung up too much about figuers , make sure your business makes a profit and have US employees.

We will be filing for renewal this weekend ( e-mail version first) everyhting is ready and I must say I am proud of us , getting all this stuff together, and reading it all back I am impressed myself (LOL):D

The 60k thing started years ago on another forum..it was to do with the amount you need to live on more than anything else..its just gone into visa folklore

[peter gold]

Find the average cost of living in your area for a family of your size and use that figure as one to show that you can support yourself and family.
There is no fixed figure and $35,000 for a family of two has often been used

[McSporran]

Find the average cost of living in your area for a family of your size and use that figure as one to show that you can support yourself and family.
There is no fixed figure and $35,000 for a family of two has often been used

And we're right back to the info I posted weeks ago...honestly people, this feels like it's been a marathon!

Good luck Biz and Everhopefull (who I think the original post was from).