1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

To incorporate or not?

Discussion in 'Business & Tax Advice' started by sexybobcat, Dec 31, 2008.

  1. sexybobcat

    sexybobcat Registered Member

    Joined:
    Apr 28, 2008
    Messages:
    52
    Likes Received:
    2
    Occupation:
    affiliate marketing
    Location:
    USA
    My husband and I are in IM, and have been for the last 2 years. Should we incorporate so we can be taxed less? LLC? I don't know much about it and was hoping someone would have some advice.
     
  2. yanghwanim

    yanghwanim Newbie

    Joined:
    Dec 27, 2008
    Messages:
    12
    Likes Received:
    1
    check out c corp....thats the way to go.
     
  3. Vivica

    Vivica Regular Member

    Joined:
    Dec 15, 2007
    Messages:
    260
    Likes Received:
    72
    Occupation:
    Agent of novelty!
    Location:
    Planet Earth ≡ This was just a first step; in time
    Try this:

    http://anonym.to/?http://www.blackhatworld.com/blackhat-seo/sale/26837-anonymous-corporations-usa-bank-accounts-sale.html

    John will set you up with everything you need! Quick and easy.
     
    • Thanks Thanks x 1
  4. virtualgeorge

    virtualgeorge Junior Member

    Joined:
    Sep 20, 2008
    Messages:
    180
    Likes Received:
    156
    I am not an accountant but if you are making decent money than you should incorporate.

    I can't remember but the first year I started making some money I wanted to incorporate but it may have already been in the middle of the year. I think there was a deadline and I was too late so I couldn't use it for that particular year and had to wait until the next year.

    Then one year I didn't earn a lot so my tax guy advised that it would be better to just file as a sole proprietor and not use the corp.

    However, I still filed the taxes for the corp (you just put zero for most everything) and there are some fees to the corp commission every year but it doesn't cost much to have the corp even if you don't use it.

    I may be wrong but I think it is better to have it in place in case you ending making a lot of money than to wait too long and miss the deadline for that year since it doesn't really cost that much and can save you TONS if you have a good tax guy.
     
  5. centerpoint

    centerpoint Junior Member

    Joined:
    Jul 16, 2008
    Messages:
    122
    Likes Received:
    33
    Location:
    Canada
    A lot depends on your personal circumstances and how much money you are earning. It would probably be a good investment to spend a little cash and speak to an accountant or lawyer
     
  6. Uptownbulker

    Uptownbulker BANNED BANNED

    Joined:
    Oct 21, 2007
    Messages:
    960
    Likes Received:
    477
    Here's the thing...........

    Generally talking to accountants is a waste of time because accounting for a corporation requires a little more work than a simple 1040, so accountants will tell you that you don't want to incorporate.

    Most lawyers don't know beans about corporations and like accountants, really don't like to work; lawyers want that stuff that they can do in half an hour that creates five or six billable hours, you see.

    Lawyers have labour guides just like plumbers and mechanics and if they can do the work in less than "book time" they still bill you for full "book time" and walk away happy.

    Do your own research; in the matter of incorporation, there is nothing that a lawyer or accountant can do for you that you cannot do for yourself.

    Hit me up; I've got some files I'll link you to and you can judge for yourself.

    Uptown.

    (John.)
     
  7. bench_400

    bench_400 Guest

    Hi John,

    Would you mind hitting me up with the files? I've made around $15000 this year from IM. Does it make sense to incorporate?

    Thanks for the info

    Frank
     
  8. drdoc

    drdoc Newbie

    Joined:
    Dec 15, 2008
    Messages:
    19
    Likes Received:
    5
    First: It is FALSE to say that as a corporation you can deduct more expenses.
    WRONG ANSWER.

    Second: C corp might not be as beneficial as S-corp. which gives you pass through taxation. (Under C corp, the corporation will be taxed and all payments to you will be taxed again, under S corp all the profit flows through to you and only you will be taxed).

    Finally, in CA for example the Franchise Tax Board asks a minimum of 800 dollars per year for the privilege of doing business in CA. Just a cost to take into consideration.

    For Blackhats it might be interesting to create one entity, have it tainted and then have it merge with a second entity (which has a new federal tax ID,
    new address etc., these mergers do not cost a lot of money).


    [Yes I am a lawyer, Yes I hate my job].

    Personally, I currently make enough money to pay the maintenance of the corp. (meaning all income goes to the corp. and nothing left for me) since I am a little paranoid and do not like doing business under my own name.
    Also if you want to sell your blog, site, whatever,you can sell the shares of your company and everything passes through to the acquirer (you don't have to transfer domains, need not get approval from the landlord, do not need approval from authors that you are assigning their copyrights..., don't have to ask adsense or clickbank, CJ ... no: everything stays in the company, only the shares change hand).

    Regarding the research, I have used and recommend the NOLO press books.
    On the one hand you do not want to become a lawyer/accountant, on the other hand you need
    to know what is going on.

    LLC is a little less formalistic (you do not have a board of directors etc. ) however, in California you cannot do certain things under an LLC like real estate, construction etc. (BTW LLC offers the same advantages as S-corporation, that is pass through taxation).

    One word of caution: a corporation is basically an insurance against personal liability. That means you keep your bank accounts separately and do not commingle personal and business, otherwise you lose the corporate protection.
     
    Last edited: Jan 8, 2009
  9. drdoc

    drdoc Newbie

    Joined:
    Dec 15, 2008
    Messages:
    19
    Likes Received:
    5
    Just a comment to a previous post regarding the anonymous corporation etc.

    Many of these incorporation services suggest that you can cheat the IRS (tax evasion) by having a corporation off shore or in a state where you do not have to disclose officers etc.

    That is something to avoid !!! You do not want the IRS on your back. Blackhat might have gotten you a sense that using questionable methods of generating cash makes you invulnerable.

    Don't evade taxes. I hope that someone who is intellectually attracted to computing would avoid the simplicity of simply not declaring income but rather find ways within the system to beat the system.
     
    • Thanks Thanks x 1
  10. kraze98nyc

    kraze98nyc Newbie

    Joined:
    Nov 14, 2008
    Messages:
    26
    Likes Received:
    5
    Occupation:
    Internet Marketing - Duh
    Location:
    USA
    I would highly suggest a S-Corp for taxation reasons. With a S-Corp you can declare a reasonable salary and then collect a "disbursement". Typically you want the "reasonable salary" to be approx 30% of your total income. This is industry standard. Let say you make $100,000 a year. Take 30k as salary and 70k as disbursements.

    30k will be Self-Employment Tax (social security and medicare taxes)
    70k will be income tax (NO social security and medicare)

    Obviously I have left out expenses, but im sure you get the tax advantages of the s-corp if done right.
     
    • Thanks Thanks x 2