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May 16th, 2006, 01:26 PM #1Becoming a business - or staying like I am for now...
Question for you seasoned pros.
I've created businesses before, and am pretty familiar iwth the process. When I do decide to do it for my affiliate ventures, it'll be sole proprietorship.
My question is: when is a good time to go ahead and get the paperwork out of the way? Can I do this for a few months prior to actually filling the stuff out?
I've had advice from both sides of the field; some say go ahead and get it done now, some say play it out for a little while, to see how it works out.
Can you forsee any issues with me waiting a cuople of months before sending in the paperwork? (aside from taxes, as I'll probably file the usual way)..
May 16th, 2006, 02:59 PM #2
- Join Date
- January 27th, 2005
If you make business name the same as your name, you don't even have to fill out any extra paperwork before taxtime and then it's just a schedule C and self-employment tax form. Maybe that's a way to test without committing.
May 17th, 2006, 12:55 PM #3
Thanks Bethany. Didn't even think about that.
Just don't want to fill out more paperwork than I have to.
May 17th, 2006, 01:06 PM #4
- Join Date
- January 18th, 2005
- Nunya, Business
That's what accountants are for
I remember when I first started making money, my parents saying I needed to get a business license. So I did that then got an accountant when it was tax time. So he handles the federal stuff, the local stuff etc. So for a given year I have federal taxes, something for city/bussiness taxes, with that I just need to add up my income from July 1 previous year to June 30 current year and give that amount and the form I get to my accountant. I keep track of what I earn from various place so it literally takes about 2 minutes to get together. And then i get something for Tangible assets/property, something like that. That's a couple of minutes I handle myself.
May 17th, 2006, 01:56 PM #5Originally Posted by TrustNo1
I think I've started and dropped half a dozen or more businesses in the last 10 years or so. All were total flops. In all of those, I did the paperwork first, then business next.
I'm hoping to break that string of bad luck (a.k.a bad habits and inexperience) by waiting to do the paperwork after trying it for a couple of months. Yes, I know that makes no sense...
But yes, since I'm getting a bit serious (my couple of months are almost up), I'll probably have to get the paperwork done, and all of the tax stuff taken care of soon. You're right, I'm going to hire somebody for that kind of thing. Calculating dollars that are to come out of my pocket, well, it hurts my head....
Good news is, it looks like I might've finally found something fun to do, AND i'm actually making good money in return. Now, if I can get my mind off of it until 5:00 pm, so that I can concentrate on my 9-5 job...
May 17th, 2006, 02:05 PM #6
I have learned being business for 25 plus years that it is best to incorporate as soon as you can. It might be higher cost, and it might be "double taxed" but it is the safest route you can take for business liability.
I have several corporations and it's the only way I will start a new business.
May 17th, 2006, 07:26 PM #7
I don't know your situation and you can do the sole proprietorship thing like I did when I first started and I still regretting actually.
Do yourself a favor and look on ebay for a book by garret sutton called "own your own corporation" I would put a link here but it is a lot cheaper on ebay than on the rich dad's website.
May 17th, 2006, 07:39 PM #8
- Join Date
- January 18th, 2005
I am incorporated and pay less tax. I am paid as an employee of the corporation and I take a draw of the leftover funds after all of the payroll and expenses each month. I still pay income tax on the draw, but do not have to pay self-employment tax on it.
If I would have been incorportated in '05 I would have saved considerably on my '05 tax bill
It is rather complicated, but I take everything to the CPA and he tells me how much to transfer to the IRS every month. EFTPS.gov is quite handy.
May 18th, 2006, 07:13 AM #9
Not sure about this, but can one start off as doing a sole proprietorship, and then move to incorporate later, down the road?
Compared to what you guys are probably making, I'm making small potatoes. For me to incorporate right now might be a bigger step than I need to take?
What do you think?
May 18th, 2006, 09:08 AM #10
Sure, that can be done. When/If you do that, making the change on January 1st will make your taxes and reporting easier.
May 18th, 2006, 09:34 AM #11
Ok, thanks Michael.
I want the paperwork/taxes to be as easy as possible so that I can concentrate on the fun stuff - like making money...
May 18th, 2006, 09:56 AM #12
I would go talk with a CPA about your options. They can help you determine your best course of action based on the laws in your state. Plus spending the time talking with accountants should help you find a good one.
I have done the sole prop and LLC on my own a number of times, but we opted for an S Corp based on our accountant and attorneys recommendations.
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