IC incorporating
Posted By: don't do it on 2005-07-29
In Reply to: Are any IC Incorporated since they are self-employed? - IC LOOKING FOR TAX BREAKS
I had to do this and have had nothing but problems. There are no additional tax breaks so far, and many additional costs, such as unemployment insurance and additional business taxes. It is very complicated and expensive. I wish I had not had to do it.
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Incorporating
My CPA said not to as there were no benefits and the only advantge could be if you were sued but that is not very likely in this business. Same write offs, less headaches to NOT incorporate. Like other poster said, no additional tax write off's. I have lots of write offs but I run a business in a portion of the house and take those write offs. I don't plan on moving or selling prior to dying and so am not worried about the depreciation of the house I take each year. I also have a lot of mileage and supplies. But I have at least 50% write-offs per year. Email me with any questions. Have been doing this for 15+ years as a small business.
Incorporating
LOL - please, yes DO talk to someone before you go thru the hassle and expense of incorporating. Incorporating is a huge hassle. I have never gone S corporation, but rarely do atty's advise incorporating unless specific circumstances are met, and I don't think a normal work-at-home IC is one of them. Self-employment tax is your contribution to Social Security and Medicare and adds to your retirement benefits, so don't be fooled by "not having to pay". And seeing as you don't even know if you can deduct utilities and supplies, I would strongly suggest you start with the basics. Once you have that learned, then discuss other options. Incorporating on any level is complicated and brings a whole new set of questions and problems, and don't let anyone tell you otherwise. For one thing, you will have to keep a whole separate set of books and have totally separate business checking accounts.
Incorporating #2
Oh yes, and I forgot. Anyone who incorporates really does have a higher risk of being audited. And this is a huge hassle, and believe me you want your books meticulous at all times. So like I said, talk to someone and ask a lot of questions - including any cost to absolve corporation, payment of salaries, issues concerning personal v. business expenses and how to separate them, additional taxes paid for corp. different from individual, costs of filing taxes yearly, end of year tax filing - do you need a CPA v. doing it yourself (this gets a lot more complicated), etc.
Incorporating
Thank you. I am just going to be working part time, but I have never worked as an independent contractor, so I have lots of questions. I will find someone who knows about this to get the dirt. Thanks much.
incorporating
I have formed a corp in the past. There is more to it than just doing it. Either you are going to do it yourself, which can be a hassle, lots of paperwork and you must form bilaws and hold meetings, elect officers etc. in order to be legal, or you can hire someone but you said it was not going to cost you a lot of money so I am assuming you are not doing that. Once you make it past forming the corp and actually getting your name accepted (someone may be using it) you need a p.o.box and a bank acct (which is not that easy to get since this is a new corp with no credit history) You can loan the corp the money to start the acct, but you need that in writing. The whole idea of incorporating is to separate personal from business. You will work for the corp, you are not the corp. If the corp does something wrong, you don't know anything about it because you just work there. However, if you mix personal and business as you are doing by naming the corp your own name, if something goes wrong, you are showing relationship between you and the corp and you could be in a big amount of trouble. A true expert on corps will tell you to never name the corp a name that has any reference to you or anybody around you, etc. You can name it, Silly Stuff Incorporated and form a subsidiary of the corp called Sally's Transcription. Now you have formed a business under the corp umbrella. You have the protection of the corp but you being Sally, work for Sally's Transcription and are not directly tied to Silly Stuff Inc. There are some advantages to a corp but for sole proprietors, those usually don't really pan out because you have to hit a major income bracket to take advantage of those. Good luck to you.
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