How many of you vendors out there are incorporated? Are there any downsides to going this route?
Incorporation
Started by kpower, Jun 27 2007 02:49 PM
2 replies to this topic
#2
BVI
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Posted 27 June 2007 - 03:04 PM
The advantages to incorporating are mainly for tax, liability and credibility (for some). We incorporated as an S corporation, which has some advantages over LLC. If you are a Sole Proprietor, I'm told by my accounting people, that "employers taxes" eat you alive. And of course, if someone is going to sue you, better for them to sue your incorporated company than you personally, imho.
I would advise you to talk to an attorney who specializes in business law, and have them explain to you the tax scenarios for incorporating vs. not incorporating. They almost always give you a free consultation.
If you are unincorporated and NOT reporting your income, you risk getting caught, and the IRS or state can put a lien on your business or personal assets until your tax debt is paid. It's best to be up-front about everything and if you owe it, pay it. And if you're going to pay it, best to be incorporated.
I would advise you to talk to an attorney who specializes in business law, and have them explain to you the tax scenarios for incorporating vs. not incorporating. They almost always give you a free consultation.
If you are unincorporated and NOT reporting your income, you risk getting caught, and the IRS or state can put a lien on your business or personal assets until your tax debt is paid. It's best to be up-front about everything and if you owe it, pay it. And if you're going to pay it, best to be incorporated.
#3
kpower
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Posted 27 June 2007 - 07:58 PM
Thanks for the response and the advice. I spoke with an attorney today and he recommended that I incorporate for many of the same reasons as you did. I feel a little weird incorporating when I haven't even bought my first machine yet but I want all of my P's and Q's in order before I start. I was wondering do you carry liability insurance? I checked into it and I can get 300k for 180 dollars a year. 15 dollars a month. That seems pretty reasonable to me. any thoughts?
