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If you were to start a business, what structure would you be?

Q

Qacer

Platinum Member
If you are starting a small, part-time, home-based business that you can run at nights and weekends, what business form would you take?

I'm considered of establishing a small, home-based business. I've been reading some articles, but I'm still stuck dealing with the tax implications for each type. I've already got an equipment lease lined up and some suppliers, but I have not decided which type fits me better.

I'm really not fond of filing tax returns multiple times a year. I'm also not too excited about hiring an business accountant for such small operations even though the accountant's fees may be tax deductible.

Any business owners have any insights?

Thanks!
 
What state are you in? LLC's seem to be the flavor of the month for liability limitation issues. But, if you are the only partner, then federal government does not consider it an LLC. Various states such as CA do, and they have an min. annual tax of $800 every year regardless of profit.

It also depends on what type of biz you are setting up. Is liability an issue? Do you look to expand and take in investors? SCorp or LLC might work, or even an LLP. If you are serious about it, talk to a tax attorney.
 
I'm in FL, and it's a state that allows a 1 person LLC. I have considered applying for a sole proprietorship because it's simple and offers similar tax deductions for my business leads (e.g. tax deductions on machine lease, supplies, part utilities for machine operations, etc.), but the one thing that I wasn't too fond of was the fact that any money sitting in my business account gets taxed 25% (?) even if it is there for future expenditures.
 
Yea Sole-Proprietorship for now. You can always move up as time goes on. Also you say your afraid of filing taxes ill be honest with you if your scared then you got to rethink some things. First as a business owner your paperwork is very important. Keeping awesome records in organized place will help you more than you know. Not just taxes but where im going with this is if you keep good paperwork your taxes wont be so bad.

Not saying filing taxes is a day to celebrate with pizza but I do want to stress that seeing how your new at it that organization with paperwork will benefit you in so many ways. Also depending on your business try to find a friend or make a friend who is a CPA and exchange him your services for his. Networking is also a great thing when starting a business. I always offer my services for free to key people. Gratitude comes back in many ways especially when you need it most.

Good luck to you I hope one day you have a CPA on your payroll 😉
 
Originally posted by: Ctrackstar126
man 4 responses in the time it took me to write that.
Click to expand...

I guess there's a lot of business owners here. 🙂 Yeah, I decided that I want to utilize my international connections in Europe and Southeast Asia, and start a part-time business involving those contacts. However, I still want to keep working full-time for another company.

My main intention for getting into a small-time business now is to learn what I need for the future. I figured when I get old and become more disposable, then I can just start my own business easily... or go full-time with an existing business venture.

I'm actually reading Nolo Press' Tax Savvy for Small Business. I want to find out more regarding taxes, but I think the likelihood is that I am going to apply for a sole proprietorship. I don't think I have to worry about any liabilities, but if it does get serious, then I'll move up to an LLC.

 
Originally posted by: Qacer
If you are starting a small, part-time, home-based business that you can run at nights and weekends, what business form would you take?

I'm considered of establishing a small, home-based business. I've been reading some articles, but I'm still stuck dealing with the tax implications for each type. I've already got an equipment lease lined up and some suppliers, but I have not decided which type fits me better.

I'm really not fond of filing tax returns multiple times a year. I'm also not too excited about hiring an business accountant for such small operations even though the accountant's fees may be tax deductible.

Any business owners have any insights?

Thanks!
Click to expand...

If you're talking about the quarterly payments, it's not like filing a regular annual tax return. My accountant set it all up for me, doing all of the paperwork and even the envelopes to send the check and paper work in. But I just pay over the internet with a CC 😀

 
Originally posted by: axelfox
If you're talking about the quarterly payments, it's not like filing a regular annual tax return. My accountant set it all up for me, doing all of the paperwork and even the envelopes to send the check and paper work in. But I just pay over the internet with a CC 😀
Click to expand...

Really? If you don't mind, how much does your accountant charge for fees? Are those fees also tax deductible?

 
Depends on many factors. If you are going to take the venture seriously, you should hire an attorney and accountant to consult with.
 
Originally posted by: HyTekJosh
Depends on many factors. If you are going to take the venture seriously, you should hire an attorney and accountant to consult with.
Click to expand...

My plan is to test my business idea and to get familiarized with the business world, but if my venture do succeed, then I will slowly build it up. However, for now, it's just me and the Internet. 🙂
 
Sole proprietorship is the best for you right now. It's the easiest to set up, simplest to file taxes for, and costs the least.
 
Originally posted by: Qacer
Originally posted by: Ctrackstar126
man 4 responses in the time it took me to write that.
Click to expand...

My main intention for getting into a small-time business now is to learn what I need for the future. I figured when I get old and become more disposable, then I can just start my own business easily
Click to expand...

Yea its good to learn early. Most businesses are a success due to multiple things but the best way to have a very successful business is to learn these lessons. They cant teach you that in business school
 
I also want to mention that I read your post and pertained the information towards you as far as a sole-proprietorship. I myself in any future business venture id would go with a LLC.
 
I actually did some additional reading from Nolo Press' website. It seems that LLC is the way to go because it somewhat like a sole-proprietorship with some liability protection. I was also reading this part of the site. It mentions that "the self-employment tax rate for 2007 for business owners is 15.3% of the first $97,500 of income and 2.9% of everything over $97,500."

Does "income" include one's personal income from another full-time job or is this strictly business income?

My outlook for the first year will probably involved losses instead of profit because I'm setting some time aside to learn the equipment and spending money on advertisements.
 
This would only include your income from your business. When you are employed, you already pay employment tax, except that the company you work for pays for half of it. Now what you should find out if you can combine incomes to reach the 97500 level, but I am unsure on that part of it.
 
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