Legal Question in Business Law in California

Whether someone working for a company is an employee or a bona fide independent contractor for tax purposes cannot be determined without looking at all the fatcs and circumstances. There is a multi-topic test often employed, that looks at, I believe, about 20 factual aspects of the relationship between the employer and the contractor/employee. I'd think it'd be harder for a company with no employees to qualify its 100% owner as a non-employee contractor while paying him no salary for holding the positions of director, president, treasurer and secretary There are a lot of good Web sites discussing this issue, including the IRS' own, or take all the facts to an accountant or an IRS employee.

You can write yourself a check out of your business checking account, sure, but you cannot treat yourself as a 1099 independent contractor to your own corporation, especially if you have an S-Corp. By electing S-Corp tax treatment you must conduct your accounting essentially as if you were a partnership, which means that payments from the company to you must be taken as owner's draws against profits, and you pay taxes at the end of the year on all profits, whether taken out of the corporation as draws or not. Talk to an accountant for further details.