On Jul 15, 2005, at 5:17 PM, Doran Barton wrote:
Not long ago, Hans Fugal proclaimed...
I tried the archives because I could swear we discussed this
recently,
but to no avail. I blame the plug sysadmin.
I'm going to start doing some contract work. I always hear these
jargon-filled statements about setting up some sort of corporation or
LLC or something, but I have no clue what that all means yet. But
I set
up my own DNS and mail servers so maybe this is for me. ;-) Where
do you
find the manpages about this stuff?
We discussed getting yourself an accountant, that much I did find. Is
that still good advice for part-time consulting work? Will any old
(or
young) accountant do, or do they have to specialize in self
employment
stuff?
Well, talking to a good tax accountant will be the best way to get
an idea
of which business type is best for the amount of income you plan to
bring
in. If you're only making a couple thousand dollars a year from your
business, an accountant may tell you to not even bother - just do
everything under your SSN and file it as "extra income."
I would like to chime in here as well - I've set up an S-Corp mainly
to avoid the double taxation that I was beginning to feel with my
side jobs. When I set it up, the corp only did about $3-4k/year. At
the time we set it up, we talked to an accountant who suggested 2
things:
First, if the corp is only making $3-4k/year, it's probably a
bit early to be going through the hassle of setting one up. He
suggested I wait until the corp was making at least $10k/year to make
it worth the time.
Second, for our purposes an S-Corp was a better plan than an
LLC. I don't recall the exact reasons, but our situation is that we
don't have any other employees, my wife and I are the only officers,
but we had the potential to grow significantly.
Then he billed me $150. :-(
We have always done all our own paperwork for taxes and accounting.
Filing taxes for an S-Corp sounds daunting, but it is really not all
that complicated in the end. My wife does the books, and she just
uses Quickbooks (I know, I know.. ) which actually makes the tasks
you have to do pretty easy.
Let me know if you have other questions - but it sounds like the
other responses on this list have lots of good suggestions as well.
-- Kimball
My accountant advised me and my partners to set up S-Corporations
which in
turn own shares of Iodynamics LLC. This apparently has nice tax
benefits -
something called pass-through taxation. The LLC pays no taxes. The
S-Corps
can write off a percentage of their income - a higher percentage
than if
they were not S-Corps, so less taxable income there too. I'm no
accountant
or lawyer, but it sounded good to me. :)
-=Fozz
--
[EMAIL PROTECTED] is Doran L. Barton, president, Iodynamics LLC
Iodynamics: Linux solutions - Web development - Business connectivity
"Go soothingly on the grease road as there lurks the skid demon."
-- Seen in a Tokyo traffic handbook
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