1. Missed the live Ask the Expert event?
    Catch up on the conversation about fertilization strategies for success with the experts at Koch Turf & Ornamental in the Fertilizer Application forum.

    Dismiss Notice

Self-employed or Corperate??

Discussion in 'Business Operations' started by afftandem, Jan 9, 2005.

  1. afftandem

    afftandem LawnSite Member
    Messages: 196

    Whats the best way to go????
    If it matters, I will have either just 1 or 2 employees this year..

    Also, do I have to put commercial tags on my vehicle(s) and trailer????
  2. MWHC

    MWHC LawnSite Member
    from Wyoming
    Messages: 218

    You may want to check with your accountant. They have some tricks to getting around the really high self employment taxes. Thats why I think we see so many LLC's and S-Corps right now. These deals also help with liability issues. I don't know the laws where you live but we don't have to have commercial tags, just commercial insurance.
  3. out4now

    out4now LawnSite Bronze Member
    from AZ
    Messages: 1,796

    Sole proprietors are risking everything but pay less in taxes. Corporations have their advantages. When my Dad started his business he started as a sole proprietorship and incorporated about 5 years latter as an S type. Limited the liability. His business has been dead and gone for over 10 years and if I wanted to I could reopen it today. Have thought about it a few times but I think I want mine to start from scratch so I can incorporate in Delaware or Nevada like most large corporations do. Check out the SBA website for all the pro's and con's.
  4. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Messages: 489

    Sole props do not pay less in taxes, they pay more.
  5. out4now

    out4now LawnSite Bronze Member
    from AZ
    Messages: 1,796

    As a corporation you're double taxed. Really depends on how you set things up.
  6. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Messages: 489

    Only a "C" corp, not an "S" corp. As an "S" corp you have a pass through income that is on a "K1" form and it is not subject to self emp tax.
  7. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Messages: 1,912

    If you are solo than it's best to stay self employeed ....if you wish to have workers n grow than an S corp is the only way to go ... the tax advantages, expense write off's & liability issues make it that way

    Good Point John on the tax confusion
  8. out4now

    out4now LawnSite Bronze Member
    from AZ
    Messages: 1,796

    Thanks, the C and S I already knew that's why I put depends on how you set it up, but the self. emp.tax exemption I did not know. Learn something new everyday. Once again thanks.
  9. promower

    promower LawnSite Bronze Member
    Messages: 1,233

    My accountant advised me to change to an "S" corp this year. She knows best and really have no idea. I've heard, like someone else said on this thread that being Inc. you pay the highest taxes. Why would someone want this, there must be some other pro's to being Inc. that weigh out the high taxes. Can anyone explain this to me?
  10. out4now

    out4now LawnSite Bronze Member
    from AZ
    Messages: 1,796

    Guys will do a C type if they want to issue stock. Double tax happens on the income the corporation brings in and pays out in dividends also if you draw a salary you will face the inevitable personal income tax. Why do it? Make company more powerful in long run.More captial raising ability, unlimited life and no limit on investors in a C type. Bad thing is investors can steer the business in wrong direction and bog it down in committees and so forth. If you wanted to be as big as Valley Crest you could do it through stocks and raise money that way and take it back private in the future if you wanted. If you're a fan of Warren Buffet like me you don't worry about the taxes being so high, here is an article about the Bush tax cut or as it should be called the reverse tax put on the lower/middle class, http://www.washingtonpost.com/ac2/w...ode=&contentId=A13113-2003May19&notFound=true

    Tax laws are always changing with each year. If your Accountant advised S type, do it.

Share This Page