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Discussion Starter · #1 ·
Incorporate....at what point did you guys decide to incorporate?
I have been considering incorporation, but do not know how to proceed.

Any help would be nice.I live in Ohio. I know there are different types of corporations and llc's. Which route is best. Did anyone do the paperwork themselves or did they use a lawyer or accountant.

Thanks again.
 

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Every year I ask my accountant if its time, i go on thursday so I will let you know what he thinks.

he as always told me if your doing less than 500k a year its theres no tax advantages.

My lawyer always tells me do it only for tax advantages, too many people have false proctection hopes with incorpating.

So the 2 people I pay alot of money to for advise tells me no.
 

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The protection things certainly is a myth. Until one gets very large and has multiple stockholders, there is no protection. Most banks and other credit grantors will ask for personal guarantees.

Any judgements, tax problems, any type of legal situation they will go after the responsible person individually.

Doug
Austreim Landscaping
 

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Discussion Starter · #6 ·
The man who does my taxes once eluded to that if I were to incorporate I could legally pay all the officers in the corporation.
The payment would be before taxes and could be as high as $800 each. The officers could be all family members. He then offered to do all the paperwork for a fee. It just got me to thinking
what other advantages there might be.

Does anyone know of a website or a publication that addresses the benefits of incorporation? i'm still looking.

thanks again
 

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I am an LLC and I could not imagine operating a business without it or a good insurance policy. Hence, the word LIMITED LIABILITY. In other words, the lawsuit (if any) are limited to the company and not the individual. Dont get me wrong..neglect is neglect no matter how you slice it, but being a corporation LIMITS the potential of someone suing the individual. And even that is not ALWAYS a guarentee. However, I would be willing to bet 9 out of 10 times it will.

Now to taxes. You are going to pay the same 15% in self-employment taxes and the same income taxes regardless. There is a wide misconception that you are going to pay more taxes and get less tax incentives by being a corporation...this is false! If you want to pay less in taxes than have a few cash accounts off the books.

My two cents.
 

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You know this info about the self employment tax is confusing to me. My tax person told me not three weeks ago that if I went LLC I wouldn't have to pay the self employment tax! I think somebody is wrong! Time to find a knew tax lady. Tony
 

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always incorp as soon as possible.. tax advantages are endless.
meet with any good CPA and you will not stop taking notes.
If you want to learn why and how, buy the book "rich dad poor dad" by Richard Koisoki.
 

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Read the book Rich Dad Poor Dad, I agree going INC early does have its advantages, as long as you are making enough to cover the accountants costs. Unless you are doing your own books.
 

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Originally posted by T.E.
You know this info about the self employment tax is confusing to me. My tax person told me not three weeks ago that if I went LLC I wouldn't have to pay the self employment tax! I think somebody is wrong! Time to find a knew tax lady. Tony
Yes, it is. All profits you make from the LLC will pass through to you as income and be taxed.

LLC info
 

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You know this info about the self employment tax is confusing to me. My tax person told me not three weeks ago that if I went LLC I wouldn't have to pay the self employment tax! I think somebody is wrong! Time to find a knew tax lady. Tony
He is partially correct in that statement. As an LLC or S-Corp, there are no self employment taxes. The company would pay you a salary as an employee. The company then pays its share of payroll taxes associated with that. In the end the payout is still about the same as a self-employment tax.

Here is what people in this thread may not realize about the advatanges of incorporating.

Say your company makes $70,000 in profit in a given year. You pay yourself a base salary of $35,000 where you are subject to witholding and also the company pays its share of payroll taxes based on that. Now there is $35,000 left that is passed on to you as additional income. The company pays ZERO taxes on that, nothing is witheld and your tax owed is just like that of a 1099 which would be based on your tax bracket. Whether you put the money in your pocket or not, you still have to pay taxes on it. You could obviously leave the money in the company for operating capital if you so desire. You can see why in this scenario it is to your advantage. The bottom line is that you must pay yourself a base salary, but keep it as low as realistically possible.

Both the S-Corp and the LLC are designed to protect the personal assets of the company owners in case of a lawsuit. The two are very similar with only a few differences in how they are structured. Your accountant can help you decided whether an S-Corp or LLC is better for your situation.

I have two S-Corps, so I do speak of this from experience.
 

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You are right TurfUnlimited. Also if I may add. Say you buy a new pickup, that pickup is bought with BEFORE tax dollars and THEN written off as an expense of the company (or depreciated). This goes for all purchaces that can be used for the company. Basically give yourself as low as a salary as possible and if you need new work clothes then let the company buy them with BEFORE tax dollars not out of your own salary paycheck because that's after tax dollars then the company will also wirte them off as an expense. Some others are food, parties, supplies, equipment, ect. Also say you really want to take a trip to say Las Vegas, wait until there is a green industry convention or something and go then. Have the company pay for the trip (meals and all) with BEFORE tax dollars and then write it off as an expense. Oh and don't forget to have a great time while you are there. Basically, IMHO there are HUGE, HUGE tax advantages with a LLC or Corp.

Also there is a protection from your personal assets with a LLC and corp as long as you follow the rules and hold your meeting minutes and act like a corp. Anyone who tells you there is not needs to probably go back to law school or find a different field. Not every attourney is a good one.
 
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