Your Business Set Up - Corporation? Partnership? LLC? Individual?

[Greenguy]

The thread on taxes got me wondering how everyone has their stuff set up.

Of coruse, when I started this all out back in 96/97, I had no idea what I was doing, so I just filed the money in with the money I recv'd from my normal job when I did my taxes.

But then I got an accountant & was advised to form an S-Corp - partly because if anyone was to ever sue me for this stuff, they'd sue the company & not my personally. The other part is based on tax breaks & retirement plans & whatnot

If you want, you can post why you are set up that way as well

[Cleo]

S Corp here.

I pretty much just do what my account tells me I should do. LOL

[ClickBuster]

My answer here's "I don't file taxes". The thing about my country is that the government shits on everybody's head, but in the mean time it lets a lot of people hide taxes. I'm sure it's concidered as a major problem, but still 99% of the people I know are hiding taxes for at least 70% of their income. The bad thing is that we're going to be in the European Union any time soon and that will f*** up everything )

I actually want to pay my taxes, really, the thing is that if I do, I'll have to eat my feet But although, I can't even get a bank loan, because not paying taxes means I'm unemplyeed, but changing it is part of my 2005 new year resolution.

[Greenguy]

Originally posted by Cleo
I pretty much just do what my account tells me I should do. LOL

Add my financial advisor to that & you've got my list of people telling me what to do

[cd34]

I saw no listing for multiples.

S-Corp, S-Corp, LLC

and soon to add another LLC.

[plateman]

Sole and does anyone have any links or info on the right way to set up a porn biz like I am gonna get a biz banking account and in ohio do you have to get a vender license for a online biz that way I can show a income on paper..

[Greenguy]

Originally posted by cd34
I saw no listing for multiples.

I have the feeling there are not that many of us that are involved in multiple business's

plateman - your best bet is to find an accountant that knows & accepts what you do for a living & have them set things up for you.

[Wenchy]

Cripes!! I've been self-employed for many years now (almost 10 I think) and, because of the nature of my day job, never really gave much thought to setting up a "formal" business.

I subcontract in the medical field, get two checks a month from the same company, and have always done my own taxes without a problem.

Hmmm... maybe it's time to reconsider my position and think about getting an accountant for both sides of my personality |bat|

Also, my son will be 16 this year, which means in two years I lose all of my nifty "built-in" deductions and I'd really rather not have to deal with that crap by myself if I don't have to... and I don't have to!

Thanks for the thread, Greenie... really got me thinking in the right direction!

[Cleo]

Originally posted by Greenguy
I have the feeling there are not that many of us that are involved in multiple business's

Actually I am but my other stuff is checks written to me personally as a subcontractor so I also have to do quarterly estimated taxes based on last year's income for my subcontractor stuff but I do only have one actually business that I run a plethora of my other business ventures through.

I've thought of also running this stuff through my corp but then I would have to pay SS taxes and stuff on this so I guess it is best just leaving it the way it is.

[MrYum]

Another vote for S Corporation here

Pretty much for all the reasons stated by Greenie. Although that corporate veil isn't quite impenetrable, it does add a layer.

I actually did all my incorporation through an online service...was rather simple. Filled out the forms...paid the fees...and within a couple weeks, I was a corporation. Complete with tax ids and certificates of good standing to do business...all in...the cost was under $1500.

Gotta love the Internet!

[GenXer]

All I know is this year I'm okay because I hardly made anything in 2003 (which was filed in Jan 2004 ) and my husband was working but we have 2 kids so we didn't really have to pay in anything, we even got paid back some money from ole' Uncle Sam thanks to the child credit.

Okay so I know I'm okay for not having paid in quarterly taxes this year because it states on the IRS websites that I did not have to pay that in this year "if I had zero tax liability in last year's taxes". Which I had NONE last year. So THIS YEAR is where it is going to get interesting.

So now I know once I get all of my income ready to report, it's going to be three times as much income for my husband and I as it was from last year. I am sure we will NOT be getting any money back from Uncle Sam like last year. He has a regular 9 to 5 job where they take taxes out and I'm self employed. So the kicker is going to be, what will taxes be like with his income and my self employed income? Should be interesting. I am sure we will have some sort of tax liability this year for the first time ever.

And now I know that since I will have a tax liability this year, I will have to start paying in quarterly. My question is, how do I know how much to pay? And if I'm just a webmaster working for myself, and the income I get is solely from affiliate payments (in other words, I don't run any paysites), do I need to state that I'm an individual? It's all so confusing. I'm not rich enough to pay some uppity accountant for their overrated advice (I am not a bigtime webmaster like Greenguy and Jim LOL). I need some good webmasterly advice! I use TurboTax to fill out my taxes and have never had a problem. Since I just work myself and have no employees, there is no need to form a "corporation", correct?

Arrrgh sorry about the long thread. Any advice for the small/ medium sized webmaster working for herself would be greatly appreciated. Thanks.

[Greenguy]

GenXer - have you been putting any money aside for taxes for 2004? If not, it's a good idea to put away a % of the money you get in that is not taxed (like checks from sponsors) so that when tax time rolls around, you have money to pay what you owe. I did this before I became an S-Corp & usually, I had more money than I owed to them, so that was a refund of sorts

As far as quarterly taxes, I think you have to pay in at least 90% of the taxes that you paid the previous year, so if you pay $1000 in taxes for 2004, they will want to see at least $900 from you for 2005 (or $225 each quarter)

Of course, I am not an accountant & you really should talk to one instead of taking my advice

[GenXer]

Ok, I contacted an accountant. I guess there was no avoiding it. No more whining from me :-). Thanks for the advice, Greenguy.

[LindaMight]

I incorporated once I realized I was making money. I am an S Corporation and pay myself "bonuses" each year. It works out perfectly and I pay every dime the government has coming to them for every single dollar I make.

Linda

[LowryBigwood]

Originally posted by Greenguy
it's a good idea to put away a % of the money you get in that is not taxed (like checks from sponsors) so that when tax time rolls around, you have money to pay what you owe.

What % of overall income should be kept aside for tax reasons? I am not a corp, but just an individual for now.

[Greenguy]

Originally posted by LowryBigwood
What % of overall income should be kept aside for tax reasons? I am not a corp, but just an individual for now.

At least 33% - in fact, if you still have a job or did have one recently, look at your check stub & figure out what % of the gross was taken out for taxes & put that same % on the side

[digifan]

I quit my job when mom was diagnosed with brain cancer back in 2002 and I am trying to make a living online, from home, not enough to pay taxes as my accountant friend explained to me. I even sold my car... Plus I got a huge loan for my home with 30% interests from a bank which I have to pay back in parts so I could buy her most special chemo and other medications she has had to take every month.

[tiny]

I set aside 25% and sofar have been ok if i could just stop payin it all at once and do quarterly like i'm suppose to i'd be ok haha

[Greenguy]

Back before I became a Corp & I was making more & more money each year, I can remember sending in what I was supposed to each quarter & then having a decent chunk of change left over. So I'd buy CD's at 2-3% interest for a couple months & make some extra money

[LowryBigwood]

Great thread by the way!

Howmuch do you have to earn for say the year, before you must then pay the taxes? I haven't been around that long, 2003 i started, and haven't really made that much yet.

Thanks for any clues.

[Greenguy]

I do believe that if you make less than $600 in a year from one company, you do not have to report it - but I play things safe & report every penny

[Linkster]

Actually - Im set up a little different as I have always had personal income from other work ( a real paycheck even though I dont work for them LOL) and had a wife that was bringing in a paycheck, so I set up my corp as a LLC Partnership which is a separate classification from a normal LLC.
It allows me to count losses from either personal or biz agains either income - the income kinda gets lumped together - and also allows me to use the other LLC Partnerships I have to interact with each other for tax purposes. That was setup back in 2000 and its worked out great as I have added businesses that always seem to lose money the first three years and those losses always count against all the others profits.

As far as the question about the reportable income level - yes the income will get reported to the IRS by the affilate program (in most cases) if you have over $600 income in a year - but you are really supposed to report all income whether it met that mark or not - you should get a 1099 form from each co. that you made over $600 with - they are supposed to send them out by Jan31st. I dont think Ive ever had all of the 1099s I needed till just before the filing date for corps which I believe is still a month earlier than personal taxes?

[Greenguy]

Yes, Corp Taxes are due March 15th

..and last year I think I got two W2's after April 15th