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Business Management question for any contractors <moo 11-29-2006
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Posted by Fran Bragg on November 29, 2006, 10:11 am

> After talking to one guy i met that is in about the same situation as me I
> figure its going to cost me at least another $1k a year if i can do most
> of it myself and as he suggested maybe more like $4K for corp fees and
> legal and tax prep, business registration every year.


It only cost me approx $600 to form an LLC in GA using an attorney.
Legalzoom.com has packages that include everything but your state fees for
less than $500. Our corp fee is a whopping $30 per year. (Varies by state)

I would suggest using a CPA for tax prep. You'll need to shop around for
one that understands your business. Costs can vary widely in that dept so I
wouldn't try and compare with someone else's business. There are several
ways to handle the tax side, and tax prep can be either very simple and
similar to what you are already doing as a sole proprietor. Or it can be a
little more complex by electing to be treated as a Sub-S for tax purposes
only. You need to at least talk to an accountant and decide what's best in
your situation. How you file will affect the cost of the tax prep.

Fran



Posted by Bob Morrison on November 29, 2006, 10:59 am
In a previous post moo@anonamoo.com wrote...
> So I am thinking about going LLC because its the next step up
>
> Although I have been reading that in this state they can still come after
> personal assets even if its not gross negligence. basically the judge
> decides if you are personally liable in the case of a small company. I am
> guessing they probably always side against the owner.
>

Most likely there will be no liability protection advantages, but
there may be some tax advantages to going LLC (S Corp). I think you will
need to hire an accountant to make recommendations for your particular
situation.

After that, keeping your own books is pretty easy. If you end up being an
S Corp. then get a copy of TurboTax for S Corp. It makes filing easy and
prompts you for the correct information.

I used to keep the books and file the tax forms for a retail business (a
sideline to my engineering practice) that was an S Corp. Never got
audited in over 20 years.

--
Bob Morrison, PE, SE
R L Morrison Engineering Co
Structural & Civil Engineering
Poulsbo WA
bob at rlmorrisonengr dot com

Posted by Matt Barrow on November 29, 2006, 11:35 am

> In a previous post moo@anonamoo.com wrote...
>> So I am thinking about going LLC because its the next step up
>>
>> Although I have been reading that in this state they can still come after
>> personal assets even if its not gross negligence. basically the judge
>> decides if you are personally liable in the case of a small company. I am
>> guessing they probably always side against the owner.
>>
>
> Most likely there will be no liability protection advantages, but
> there may be some tax advantages to going LLC (S Corp). I think you will
> need to hire an accountant to make recommendations for your particular
> situation.

There's both.

In the event of a legitimate error, you personal assets have protection that
you would not have at all under a sole-proprietorship. There's also enormous
tax advantages in doing a LLC as your taxes are assessed as well as
deductibility.




Posted by RicodJour on November 29, 2006, 1:04 pm
Matt Barrow wrote:
> >
> > Most likely there will be no liability protection advantages, but
> > there may be some tax advantages to going LLC (S Corp). I think you will
> > need to hire an accountant to make recommendations for your particular
> > situation.
>
> There's both.
>
> In the event of a legitimate error, you personal assets have protection that
> you would not have at all under a sole-proprietorship.

There are so many details that people neglect that the corporate veil
is often imaginary. Signing a contract and neglecting to add
"President, XYZ Corp." or whatever is a common one.

R


Posted by Matt Barrow on November 29, 2006, 8:31 pm

> Matt Barrow wrote:
>> >
>> > Most likely there will be no liability protection advantages, but
>> > there may be some tax advantages to going LLC (S Corp). I think you
>> > will
>> > need to hire an accountant to make recommendations for your particular
>> > situation.
>>
>> There's both.
>>
>> In the event of a legitimate error, you personal assets have protection
>> that
>> you would not have at all under a sole-proprietorship.
>
> There are so many details that people neglect that the corporate veil
> is often imaginary. Signing a contract and neglecting to add
> "President, XYZ Corp." or whatever is a common one.
>
Do you have a citation or two?

Considering a million transactions are handled every day, I suppose there
can be slip-ups, but nothing remotely like the instance you refer to.

--
Matt
---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.



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