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Should I incorporate??

Last post 03-06-2009 7:37 PM by nellycleans. 3 replies.
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  • 03-17-2008 8:52 AM

    Should I incorporate??

    I've been in business about 5 years as a sole propiretorship <sp>.  I have 5 employees.  Taxes are killing me!!!  I'm still paying from last year!!  Any advice would be be great.  I'm not familar with all of the different types of corporations.

     

    Thanks!

    Courtney

  • 03-17-2008 12:39 PM In reply to

    Re: Should I incorporate??

    Courtney

    Where you are sole, it might not help going on a payroll. I was sole for about 17 years, but we just switch to S-Corp started on Jan,1st. then I and my wife went on payroll. Helped some being s-corp and going on payroll. Reason when your a sole, what ever is left over is taxed on your personal income. when you go s-corp you go on a payroll. say for instance there is 100K left over, you go on payroll for about 50K you pay all your taxes on the payroll. the other 50K you still pay all your federal taxes, but not social security taxes. you could save around maybe 6k just on that.

    you should speak to your accounting about all this, If your accounting is not a CPA with a lot of experience and knowledge I would really consider looking for another accountant, a bad accounting can cost you a lot of money.

    also as I said in the other post, its good to constantly go through your books to look for money that is being wasted, look for areas you can cut. also make sure your claiming everything your entitled too by law, and some.

    RJ Cleaning Service, Inc.
    Serving Central Massachusetts
    www.rjcleaning.com
  • 04-25-2008 12:26 PM In reply to

    • SpectroPro
    • Top 100 Contributor
    • Joined on 03-01-2008
    • Hamilton, Ohio (KHAO)
    • Posts 69

    Re: Should I incorporate??

     You can also go LLC. That's what I did.  This is Limited Liability Corporation.  LIke S corp, you go on payroll.  But the biggest benefit of becoming incorporated in any capacity is you protect your personal assetts.  In other words, as you are now, if a client sues you for 250,000.00 that can be taken from your home, car, anything you own at all.  Including your kids savings etc.....  However, by incorporating, all they can go after is the business assetts.  

    One little thing my old boss used to do which was ingenious...  He bought everything for the business under HIS name.  All of our equipment was owned personally by him (duh....but you'll see in a sec...) including cleaning equipment, vans, building, etc...  Then, he leased everything to the corporation.  This gives the business HUGE tax advantages because of the leasing, and if he were ever sued, the only thing anyone could go after would be the legal assetts of the corp...this would be the tiny bit he kept in the bank.. As everything else was owned by him personally, they couldn't be touched.  

     

    Greg Swagler, Owner
    http://www.allclene.com

  • 03-06-2009 7:37 PM In reply to

    Re: Should I incorporate??

     Hello Greg, I just wante to comment on your post. Your old boss ideas it's really ingenious!. I will use this information and really consider it...Thank you for sharing my friend!

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