Starting own corporation?

[MrMatt]

OK, so I was thinking with the amount of money I clear on stock gains, would it be better to incorporate, for tax purposes?

Also, how would one go about doing this (generally, I'm sure the details are complex)? Also, how would one fund the corporation initially, let's say I found the corporation, how do I know move 500K or whatever into the companies coffers. Also how would I pay myself out of that money? Does the corporation have to pay taxes on the money, and then I pay taxes after I pay myself as well?

I'm just trying to figure this all out; My father is actually about to do the same thing, and he's confident he'll pay less taxes on his stock gains if he does it through a corporation that he founds (an LLC). I just don't see how this is possible.

 

[imported_Imp]

If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

 

[hydroponik]

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

How does your post have anything to do with the OP's question?

 

[ric1287]

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

what the fuck?

 

[HopJokey]

A traditional corporation is subject to double taxation. That is the corporation itself pays it's own "entity" income taxes like it was a regular person (at corporate tax rates). Then when distributions are made to shareholders (dividends) those are also subject to income tax for each individual.

Now if you file your corporation in the US under IRS sub-chapter S (S-Corp) then typically all income of the corporation (see IRS.gov for details) is only taxed once to all the shareholders as "pro-rata" income. The downside is whether you make distributions or not the shareholders are always tax liable for the corporations income that year. See: http://en.wikipedia.org/wiki/S_corporation

LLC's are taxed as partnerships in the U.S.

Both LLC's and Corporations offer personal protection from the company's mishaps.

Depending on the state which you incorporate/start LLC there is also franchise fees (i.e. in CA a corporation has to pay 1.5% income franchise fee with a minimum of $800 after the first year).

 

[sactoking]

Originally posted by: MrMatt
OK, so I was thinking with the amount of money I clear on stock gains, would it be better to incorporate, for tax purposes?

Also, how would one go about doing this (generally, I'm sure the details are complex)? Also, how would one fund the corporation initially, let's say I found the corporation, how do I know move 500K or whatever into the companies coffers. Also how would I pay myself out of that money? Does the corporation have to pay taxes on the money, and then I pay taxes after I pay myself as well?

I'm just trying to figure this all out; My father is actually about to do the same thing, and he's confident he'll pay less taxes on his stock gains if he does it through a corporation that he founds (an LLC). I just don't see how this is possible.

There's a VERY long answer to this, but in general your dad's wrong. Any capital gains made by a pass-through taxation entity (proprietorship, partnership, LLC, S-corp) will pass through to your Schedule D, so you pay capital gains on them.

Any capital gains made by a 'regular' entity (C-corp or duly elected LLC) will be paid as capital gains by the entity AND as capital gains on your Schedule D when the profits are distributed as dividends. That's double taxation.

Believe me, the IRS closed those loopholes a while ago.

 

[imported_Imp]

Originally posted by: hydroponik

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

How does your post have anything to do with the OP's question?

Turns out absolutely nothing, was just reading the title, and felt like sharing.

 

[HopJokey]

For tax purposes, unless you are able to write down a bunch of expenses you couldn't personally do that you can as a corporation/LLC it doesn't make sense.

 

[maziwanka]

Originally posted by: ric1287

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

what the fuck?

hahahahahahaha

 

[krylon]

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

Epic and completely off topic. LOL

 

[HopJokey]

Originally posted by: maziwanka

Originally posted by: ric1287

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

what the fuck?

hahahahahahaha

Holy Tangent, Batman!

 

[LordMorpheus]

Originally posted by: krylon

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

Epic and completely off topic. LOL

I still don't get it. Does Imp think the OP was asking if he should cheat on his wife for tax reasons?

 

[imported_Imp]

Originally posted by: LordMorpheus

Originally posted by: krylon

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

Epic and completely off topic. LOL

I still don't get it. Does Imp think the OP was asking if he should cheat on his wife for tax reasons?

Nope, "incorporate" brought that story up in my head, and I thought OP should look at it from an additional perspective. Ok, I just thought it was a weird story and had to be told... Sorry for the thread jack, OP.

 

[oiprocs]

Originally posted by: LordMorpheus

Originally posted by: krylon

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

Epic and completely off topic. LOL

I still don't get it. Does Imp think the OP was asking if he should cheat on his wife for tax reasons?

*whooooosh*

 

[Descartes]

Talk with a CPA, seriously. These kinds of questions aren't for forums. Some people on here are company owners, myself included, and others are accountants. Getting superficial advise on a critical issue isn't worth it. If you're willing to put up the money to move forward with such an initiative, pay a few hundred bucks and just talk to someone that can consider your entire financial situation.

In short: It may or may not make sense depending on the situation. That's the best answer you're going to get, imo. Most people here haven't even formed a company.

 

[dirtboy]

Also a Corporation is only a Corporation if you treat it like a Corporation. If you don't understand that, then read it again. There are specific things you must do to be a Corporation or the IRS can at any point in the future, say you never had one.

 

[oiprocs]

Originally posted by: Descartes
Talk with a CPA, seriously. These kinds of questions aren't for forums. Some people on here are company owners, myself included, and others are accountants. Getting superficial advise on a critical issue isn't worth it. If you're willing to put up the money to move forward with such an initiative, pay a few hundred bucks and just talk to someone that can consider your entire financial situation.

In short: It may or may not make sense depending on the situation. That's the best answer you're going to get, imo. Most people here haven't even formed a company.

Good advice? On ATOT?

Yo, we need to get back to our roots people. More nef threats, less help desks.

 

[MrMatt]

thanks for the replies!

 

[Ns1]

Don't forget the paperwork headaches + additional CPA fees you will incur

 

[IHateMyJob2004]

To quote Warren Buffet. Well pseudo quote. Taxes should not be a consideration when making investments.

 

[her209]

Originally posted by: Imp
If you're married, probably not.

I know someone who just "incorporated" a year or two ago. Fast forward to a few months ago, when daddy (of that family) tries to commit suicide. Turns out he was fucking around on his wife at work, which was adding to the stress he was feeling, so la di da, major headache for divorce.

Thread derailment complete.

 

[MrMatt]

Originally posted by: IHateMyJob2004
To quote Warren Buffet. Well pseudo quote. Taxes should not be a consideration when making investments.

If I'm already making money they are. I'm not investing and considering taxes, I'm investing, and am trying to see if there's a way to pay less.