Incorporating
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- glen
Have any of you freelancers incorporated and, if so, did you see any tax benefits in doing so? Any drawbacks?
All "help" appreciated.
- ********0
we incorporated about 5 years ago.
In all honesty, i don't know if it made any difference for us. I suspect not. Your money stays in the corporation until you need it, then you're taxed on it
- ********0
satan is incorporating in designers?
everything starts to make sense now.
- t_rock0
If you are on your own, and not working with anyone, it's only a benefit to go limited or incorporated if you don't want the liability of sole proprietorship, i.e. the client can't take your car, house or dog if you mess up
- skelly_b0
Go with LLC, cheaper to setup and you don't have to file annual reports.
If you are solo the only corporation that would make sense is an s-corp, which has the same tax benefits as an LLC. They both flow through, meaning profits will be counted as your income.
Either way just amek sure you keep records of all those business expenses, mileage, etc. Can help a lot come tax time.
Get an accountant, they can steer you right if they know what they are talking about.
- glen0
awesome....thanks
- mrdobolina0
wow, a thread on nt that was extremely helpful.
- mbr0
Yeah, Inc is only good for huge businesses.
LLC -
adv. - transparent tax, meaning you get taxed once - the money goes directly through the LLC to you.
Nothing required.SCORP - next best thing to the LLC. Transparent taxing (I believe).
dis. - you have to keep records of meetings, and there has to be x amount of meetings per year (even if its just 2 people)Inc. - adv. - none that I personally know of, but I am sure that when setup by a skilled laywer its more protective
dis. - you are taxed TWICE, once at the company level, then again as an individual.
Very complicated records needed (and appointed personnel).MBR Studios is an LLC.
- mpfree0
it's very smart to set up your gig as an LLC. Come up with some arbitrary name and let it roll. in the design field, i'm not so sure you need protection as you would other fields, however if you plan on becoming bigger and taking more risks, talk to a lawyer and ask them about your options. basically, you run the operation or whomever you choose to be a member of the LLC and it give you protection from creditors etc. and yes you get tax breaks.
I just set one up for a commercial cleaning group I'm starting. the system works for you.
"fuck the tech world, you can have it back" - Dr. Jaa
- mpfree0
btw, you can do it here: http://www.legalzoom.com/legalzi…
- blaw0
okay, fine... if we're going to start being helpful around here...
i have gotten a lot of mileage out of this book, and apparently there's a new edition out:
http://www.amazon.com/Working-Yo…
- mpfree0
ohh shit blaw, don't get me started. I have some Business Plan and Model PDF's as well if anyone wants em...
- mpfree0
Limited liability companies, or LLCs, combine the personal liability protection of a corporation with the tax benefits and simplicity of a partnership. In other words, the owners (or "members") of an LLC are not personally liable for its debts and liabilities, but also have the benefit of being taxed only once on their profits. Moreover, LLCs are more flexible and require less ongoing paperwork than an S-Corporation.
- joyride0
setting up an LLC is a good idea. But you need to sign everything with your tax id number once you get it. Some companies want you to sign with your own soc # and what not. Basically you're signing a personal guar. that you won't drop off the earth. Once you do that, you're liable. Always sign everything as your Co. with no personal guarantees. And if you've already done that and now have a tax #, change it ASAP
- mbr0
you sure about that joyride?
As I understood it, it doesn't matter as you are getting taxed eitherway (assuming its your LLC).
In the contract, it'll state the company name your client is contracting with. The #, tax id or ss, is just for tax purposes.
I'll have to look into that...
- mpfree0
Never give your SS# for any contract. Fuck that. You operate that company. The company is your shield.
- ********0
LLC is what we are
- nosaj0
Talk to an accountaint - lot's you can do when incorporated... ie Discretionary Dividends and or setting up Family Trusts etc...
- doesnotexist0
great tax benefit, you can write off almost anything you buy as an artist. magazine subscriptions, books, equipment.