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Registering a business to avoid taxes

Discussion in 'Business & Tax Advice' started by thedon23, Aug 7, 2010.

  1. thedon23

    thedon23 Elite Member

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    I want to register a business at my home address so I can avoid taxes on my internet marketing earnings.

    I believe they said my best would be to register as an "S Corporation". I may be mistaken though.

    What do you guys think? How much would it cost me to do so?
     
  2. iq465

    iq465 Regular Member

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    Registering an s corporation yourself runs $150-500 depending on the state, without lawyer fees. Lawyer cost to register is another 3-500, but you can do it yourself if you have some diligence.
     
  3. thedon23

    thedon23 Elite Member

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    Let's say I registered as an S Corporation and was approved in 2-3 months. Would I still have to pay taxes on money I made let's say, in March of 2010?
     
  4. iq465

    iq465 Regular Member

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    Man Don, i need to find out the answers to the same questions. My whitehat businesses are all llc's i'm not sure about how to report IM earnings.
     
  5. thedon23

    thedon23 Elite Member

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    Yeah, I understand. Most of my earnings were with CPA Lead, and I believe they report taxes automatically (they asked for my W9 after I got approved).
     
  6. scubasteve

    scubasteve Junior Member

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    You will have to pay taxes on your earnings, regardless if you earned them, or your company earned them. Granted, you will be able to write off business expenses, but you can do that now even as a sole proprietor. There's no legal way to just not pay taxes on income you've earned.
     
  7. lazybones

    lazybones Newbie

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    If you have already received the payments you are going to have to deal with the taxes personally. The most setting up a corp. would do is defer some of your income to a later date depending on the year end for the corp. but if you have already taken the payments personally so there is no real way to move the income to the corp.

    I think most lawyers will tell you the value of a corp. is more for limiting your liablilty of the business contucted by the corp. ie) the corp holds a lease on a property and you default on the lease (if you havent personally guarenttees it) the landlord would be limited to suing the corp for what assests are in the corp to cover their losss vs sueing you for your personal assests like house etc.

    Another down side is it costs more money to file a corp return. 1K to 1.5. I am not sure about where you are but where I live it must be filed by an accountant or book keeper with electronic filling ability. You must also maintain the corp yearly with updated minutes etc. and it requires special filling to wrap one up if you ever want to stop using it.

    This is only my understanding and I advise you seek an accountant and a lawyer for the exact details for your situation, it shouldnt cost you more than $100 to find out what you need.
     
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    Last edited: Aug 8, 2010
  8. Delboy2424

    Delboy2424 Regular Member

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    why do people always think the step-up on bedroom trading to making millions is to form a company and not pay taxes...apparently... dont you thnk we would all be doing it:loco:
     
  9. Affiliate Mgr Dave

    Affiliate Mgr Dave Registered Member

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    If you are in the US you will always have to pay US federal and state taxes, regardless if you have an s-corp, c-corp, LLC, or nothing. Same goes for any other country in the world as far as I know.

    It was stated above, the main reason to have a biz is to help you legitimize your tax write-offs (when you buy a PC for your PC Business you can take the cost of the PC off your total earnings for the year, making the amount you owe in tax less).
     
  10. HazardPT

    HazardPT Registered Member Premium Member

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    If you are doing sole proprietor, do an LLC or S-corp and run that shit out of Nevada or Delaware. You just pay a single payment of $250 per year to Delaware to shut them up no matter how much money you make. The rest of it you'll be taxed as if you were a person by the state you're living in.

    *Note* make sure you collect as many damn receipts as you can :p
     
  11. hardybents

    hardybents Regular Member

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    an s corp all the profit flows through to you, set up on a fiscal year 1/1/2010 - 12/31-2010. You will have to pay quarterlys if you are making good money. Then pay personal tax and small corp tax depending on state. C corps are good as you can play around with keeping the money in the corp and paying only corp tax, kinda a moot point now that Obama is in the office. Why do you think that setting up a corp you dont have to pay taxes on the money, if you make money you will be taxed. Capital gains is a beeeatch.
     
  12. hardybents

    hardybents Regular Member

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    best bet is have people pay in cash, if you can. forget about setting up a corp, its a pain. If you are not worried about liability, dont set one up. Filing is a pain and very expensive. Can you have people pay via paypal, and just use your paypal account to pay others? Risky, uncle sam is almost as bad a craigs list.
     
  13. curtezriggs

    curtezriggs Newbie

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    Quick question, does paypal report earnings?
     
  14. BorisTipsIt

    BorisTipsIt Regular Member

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    In general, S corps are better than LLCs. If you are the only owner, the IRS doesn't even recognize LLCs. They are considered disregarded entities and you just end up reporting everything on your personal taxes as though you were a sole proprietor.

    S corps have a calendar year end, so you can't play funny with the dates like with a C corp. A big advantage with the S is so long as you take a "reasonable salary", you can take the rest of your profits as a distribution and not pay all the add on taxes like social security, FICA and so on. Not a huge saving, but every bit counts.
     
  15. RuthSam

    RuthSam Jr. VIP Jr. VIP Premium Member

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    If you can accept payments by PayPal or Liberty Reserve etc. you may look into the direction of offshore companies, this only if you can afford the risk to get cought.