Question: how many of you are incorporated?

9 replies
Any plus or minuses on LLPs or Incs? Or do you all just have money come to your personal Paypal?
#incorporated #question
  • Profile picture of the author kindsvater
    You're in a position to get more tax deductions with an inc.

    .
    {{ DiscussionBoard.errors[8028107].message }}
  • Profile picture of the author writeaway
    If someone sues you, the corp takes the hit, not you. But LLC is better IMHO. It uses pass through taxation while giving you protection.
    {{ DiscussionBoard.errors[8028976].message }}
  • Profile picture of the author Sam Woods
    I'd stay away from Paypal, unless you want a possibility of them banning you and holding onto the funds in your account for 180 days....
    Signature
    {{ DiscussionBoard.errors[8032527].message }}
  • Profile picture of the author RobinInTexas
    If you incorporate, it's going to cost you a few hundred $$ a year just to maintain the corporation. Taxes get more complicated. You may or may not be able to find a bank that doesn't charge you monthly fee. If you are making lots of $$$ talk to your lawyer and your accountant.
    Signature

    Robin



    ...Even if you're on the right track, you'll get run over if you just set there.
    {{ DiscussionBoard.errors[8032567].message }}
  • Profile picture of the author bizgrower
    Of course you need to consult a professional and I apologize in advance for any
    inaccuracies since I am not a tax or legal professional, but:
    1) It depends upon how much you earn

    2) Over simplified example: Suppose your little business takes off and makes $100,000
    in a year and you did not incorporate, or incorporated as a sole proprietor. Then you
    would pay income and employment (social security, Medicare/Medicaid...) taxes
    based upon that $100,000 and allowable deductions. (And possibly whatever fees or
    penalties the IRS/state does for not paying quarterly estimated taxes...) And you have
    little or no protection of your personal property/income if sued.

    Whereas, if you incorporate you have more liability and personal protection. Also,
    you pay income and employment taxes on just your salary instead of revenue (say $40,000 salary of the $100,000 your business earned). Then only income/capital gains tax (not employment taxes) on dividends/bonuses your corp or llc pays you - if any.

    3) It can be a hassle and possibly expensive to change from say sole proprietor
    to corporation or llc - so do it correctly from the gate


    Dan
    Signature

    "If you think you're the smartest person in the room, then you're probably in the wrong room."

    {{ DiscussionBoard.errors[8037411].message }}
  • Profile picture of the author Fred Young
    Getting incorporated was the best thing I did for my business. I originally incorporated because I'm a contractor, so I already had my business going when I got into IM.

    All money earned (IM or contracting) runs through my S Corp. and my accountant handles my bookkeeping.

    As was mentioned before, an S Corp. will be better for taxes. I don't really know much about LLC's, so I can't really comment about them.
    {{ DiscussionBoard.errors[8037478].message }}

Trending Topics