So how is everybody else in business

Discussion in 'Business Operations' started by Hodge, Sep 26, 2002.

  1. Expert Lawns

    Expert Lawns LawnSite Silver Member
    Messages: 2,660

    sole proprietor.....simple. 2nd year in the biz. will look into other stuff later on. i'm doing fine this way
  2. Hodge

    Hodge LawnSite Senior Member
    Messages: 261

    well I did the LLC thing. Was able to do it online with the SOS and with an consol with my CPA. I will be offering treatments by next year working on my lic now. Thanks for everybodys input....:D
  3. lasher66

    lasher66 LawnSite Senior Member
    Messages: 399

    What is the first step to switching from sole proprietor to LLC? Where did you go online? I was thinking about switching also. Thanks

  4. tailoredlook

    tailoredlook LawnSite Member
    Messages: 142

    right now I'm a sole proprietor. Next year I incorporate tired of being responsible for my own actions
  5. Hodge

    Hodge LawnSite Senior Member
    Messages: 261

    There is a weath of info online. A place to start is

    They will incor for you but it is more expensive then just contacting you Sec Of State for info. The rules differ per state, but something I thought about was to incor in DE and then apply for a state permit in my state (TX). DE will incor for $70 where my state is 200. It works out about the same after the permit in TX. Appx. 140 - 150. :cool:
  6. Darryl G

    Darryl G Inactive
    Messages: 9,500

    I bought a software program from Staples when I was first thinking about opening an LLC. It's by Made E-Z Software and is called Limited Liability Companies. I think it was only $20 or so.

    You will need articles of organization to file with your state and the software has one in it. I actually had my attorney do it instead. I don't remember being thrilled with the software, and things vary from state to state, but I did find it helpful.

    Your state probably has a small business start-up program (most do) and they should be happy to send you everything you need. If you're really interested in the software I listed above, let me know and I can take another look at it for you.

    Good Luck.

  7. lasher66

    lasher66 LawnSite Senior Member
    Messages: 399

    That is weird, according to the link you posted. I can incorporate my business in Delaware even though I operate in Ohio. Delaware incorporate fees are $99 and Ohio is $450. Did anyone else do this? It shows that this is what many Corps. do .

  8. leadarrows

    leadarrows LawnSite Senior Member
    from N/A
    Messages: 925

    Just ask my accountant what he thought of LLC's and he sent me this article. I hate all the extra work till tax time, then I don't mind so much.


    Page I of 3

    Accounting ,Accounting and Audit
    Business and Finance
    Consulting E-Business
    '‘Financial Planning Information Systems Payroll

    Incorporating makes sense Source: Dental Economics
    Publication date: 2002-09-01
    TAX Q & A

    My CPA advised me to incorporate my general dental practice as a Subehapter S corporation. I thought retirement-plan options were identical, whether or not a doctor is incorporated. Is my CPA doing this just to get higher accounting fees?

    Charles Blair, DDS

    John McGill, MBA CPA, JD

    Probably not. You are correct in pointing out that there is virtually no difference in deductibility of retirement-plan contributions and fringe-benefit programs, regardless of whether you are
    unincorporated or operating as a Subchapter S corporation.
    antial differences in the amount of payroll
    @rporated, all of your net earnings frori@ d on Schedule C)
    empig) e@nt t@ax. The initial $84,900 is subject to Social Security
    taxes in 2002, with the balance subject to the Medicare payroll tax LIL (2.9 percent).

    But Subchapter S doctors have several ways to reduce their taxable income from the practice. Amounts paid out of a Subchapter S corporation to the doctor for building rent and equipment rent are not subject to payroll taxes. Likewise, contributions made on behalf of the doctor to a qualified retirement plan are free from payroll taxes. Since this deduction is not allowed on Schedule C, unincorporated doctors must pay payroll taxes. Finally, Subchapter
    dividend, rather than. salaxy, WhilcAiy,idGgdg-a=.Su@j ect to federal es.

    Operating as a Subchapter S corporation can result in §i@@ payroll tax savings, particularly for high-income doctors. Where the payroll taxes saved exceed the additional after-tax cost of operating as a corporation, Subchapter S incorporation makes economic sense.

    My practice has used a car for business p '‘ oses for several years. urp
    My CPA recommends that I calculate the deduction using the mileage rate, rather than keeping track of actual expenses. Is this the best approach?

    Page 2 of 3

    Probably not. In most cases, doctors can substantially increase their business-car deductions by paying all of the vehicle'’s operating
    costs through the practice and deducting the actual cost of operation, rather than the 36.5-cent mileage rate.

    Auto expenses that should be paid through the practice include gas, oil, maintenance, repairs, property taxes, tags, licenses, and insurance. Since total business-car deduction includes depreciation on the cost of the car in addition to these items, most doctors end up with a larger deduction than when utilizing the mileage rate.

    My wife has worked as an employee in my practice for many years. She does a variety of duties - marketing, bookkeeping, payroll, and other managerial tasks. While the true value of her services is much higher, I have been paying her only $3,000 per year, in order to minimize federal and state payroll taxes. Because Of several tax- law changes, I understand that I should be paying my wife a higher salary- If my practice operates a 401 (k) profit-sharing plan, bow much should I pay my wife?

    As a result of the 2001 Tax Act, the proper salary to pay an employed spouse has changed. We recommend that you have your spouse perform services valued at $15,000 annually and pay her at this rate. This will allow her to generate the maximum salary deferral into the 401 (k) profit-sharing plan, assuming that she meets the eligibility requirements. The maximum 401(k) salary deferral is $1 1,000 in 2002, increasing by $1,000 per year thereafter until it reaches a maximum of $15,000 in 2006. This will also qualify your spouse for other practice fringe benefits, including fully deductible travel, and for the maximum child-care tax credit, if applicable, while minimizing federal and state payroll taxes.
  9. Hodge

    Hodge LawnSite Senior Member
    Messages: 261

    Thats right the only thing u would have to do is registar in your state as a forgein company, but that cost normally is offset by the initial cost of incorp in your state.... wow 450 and I thought TX was expensive. Is that with that company fee.. have u checked with your Sec of State and find out how much it is to do yourself??

    That company (in the URL) adds a processing fee for the work they do when normally u can do it cheeper yourself.

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