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question starting my own IM company

by Coolstro
11 replies
How would I go about creating a company to file my income through internet marketing, so the government doesn't screw me with taxes. what type of company should I make? any help or direction my fellow warriors would be much appreciated.
#company #question #starting
  • Profile picture of the author Mitsakis
    a limited liability company.
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  • Profile picture of the author David Keith
    in the usa, it would be an llc (limited liability company). it operates much the same way as a sole proprietorship (as a pass through tax entity) but with added liability protection.

    but you are in canada, so i am not sure what their equivalent is.

    in the usa, its pretty cheap to setup an llc. just a couple hundred dollars.
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    • Profile picture of the author Cru
      Originally Posted by David Keith View Post

      in the usa, it would be an llc (limited liability company). it operates much the same way as a sole proprietorship (as a pass through tax entity) but with added liability protection.

      but you are in canada, so i am not sure what their equivalent is.

      in the usa, its pretty cheap to setup an llc. just a couple hundred dollars.
      There is no equivalent to a LLC in Canada. I just did a sole proprietorship since it was cheaper. I did everything through BDC, it only cost a couple hundred (which included the name search, etc.).

      With a SP everything is just considered your income while if you incorporate the business is it's own entity and you pay yourself a salary.

      If you are doing less than $500k then incorporating is an attractive option because of how low the tax rate is. Just remember though, you'll be paying personal taxes on any money you take out of the business as a salary. For instance, you'd be in the highest tax bracket if you made $500K personally, but you'd be in the lowest tax bracket if you made $500k as a business.

      No one can really tell you what you should pick though, it is dependent on your business, your income level, etc.
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  • Profile picture of the author Istvan Horvath
    1. Never ask for legal (tax) advice in a public forum.

    2. Even companies pay taxes on their profits.

    3. If you take out any money from the company for yourself to spend... you pay income tax on it (because that was your income).

    4. Below certain level of income incorporating your business just doesn't make sense. Consult with a local tax/accounting professional.

    5. You can still deduct all your expenses against your (business) income as a self-employed, without having a company.
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  • Profile picture of the author keyon
    Originally Posted by Coolstro View Post

    ...so the government doesn't screw me with taxes.
    As far as doing business in the US, I'm not certain that an LLC necessarily helps in regard to taxes -- unless maybe you have partners in the business, or you plan to hire employees, that sort of thing. If you're a one-man shop, it's just as well (I think) to operate as a sole proprietorship. I don't think an LLC will save an individual any tax money. At least that's my understanding.
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    • Profile picture of the author Cru
      Originally Posted by keyon View Post

      As far as doing business in the US, I'm not certain that an LLC necessarily helps in regard to taxes -- unless maybe you have partners in the business, or you plan to hire employees, that sort of thing. If you're a one-man shop, it's just as well (I think) to operate as a sole proprietorship. I don't think an LLC will save an individual any tax money. At least that's my understanding.
      Correct. An LLC is a limited liability corporation which basically means that if your company is sued they cannot go after your personal assets (this applies to an incorporated business as well). However, with a SP if your company gets sued your personal assets would be on the line if you're found to be in the wrong.

      I forgot to mention that in my overview above.
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  • Profile picture of the author David Keith
    an llc is a "pass through tax entity" just like an SP. that basically means that you have another identification number (tax id number) which is kinda like a SS#.

    pass through tax entity means that the company tax id number does not actually pay taxes, and that all income or losses are passed through to the owners SS#.

    so in summary, there is no tax advantage or disadvantage of an llc over an SP. its is just for liability issues.
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  • Profile picture of the author Guru_Marketing
    Originally Posted by Coolstro View Post

    How would I go about creating a company to file my income through internet marketing, so the government doesn't screw me with taxes. what type of company should I make? any help or direction my fellow warriors would be much appreciated.
    Go to this site: Incorporating & LLC Formation - Business Incorporation Service - Incorporate Business | Incorporate.com

    And look for LLC (Limited Liability Company). I recommend you open one in NEVADA state. Why? That's because that's the only place where share holders do not share any information with IRS :-)

    Also check this out (Robert Kiyosaki's adviser):
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  • Profile picture of the author pacelattin
    Move to Bermuda, start a corporation there and drink a lot of rum.
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    • Profile picture of the author MarkJonesCBDoctor
      Originally Posted by pacelattin View Post

      Move to Bermuda, start a corporation there and drink a lot of rum.
      No matter how you slice the cake, the government(IRS) will always get there cut!

      Or do what I quoted and move to Bermuda....

      Good Luck!

      Mark
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  • Profile picture of the author Coolstro
    thanks for all the responses warriors
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