by Diane Hughes
Most US-based small businesses are getting eaten alive in taxes! That statement has proven itself true over and over again. However, while small business owners want to save money, many are literally afraid of incorporating their companies. The paperwork, the additional reports, having a set payroll amount each month, and other visions swirl around their heads. Those visions could be costing you a ton!
Let me take a few minutes to explain what you need to know about incorporating your business. While it certainly isnít a move every business will want to make, there are definitely some large benefits associated with incorporation.
MYTH Incorporating means I canít take money whenever I want it.
TRUTH Yes you can! This is a MYTH that holds a lot of small business owners back from incorporating. If you set a payroll amount for yourself, then decide you want/need more money, you simply write yourself another check and call it an "owner distribution" or a "draw."
MYTH Thereís too much paperwork involved once you incorporate. I donít have the time.
TRUTH There are some additional forms you have to complete. There are some additional taxes you have to pay. HOWEVER... read this carefully... for the three or four extra forms and the cost of the additional taxes, most businesses will still save when compared to counting every dollar you make toward personal income.
MYTH The only good reason to incorporate is for personal protection. The difference in taxes isnít that much.
TRUTH While incorporating your business will help protect you from lawsuits and from having your personal property seized, there are more benefits than that. The tax savings can be quite significant.
MYTH With the attorneyís fees, the CPAís fees, the additional income tax returns, and the forms I have to file quarterly, itís just not worth it. I wonít really save any money.
TRUTH Every case is different; however, most small businesses will more than make up the $1500 - $2000 it costs to incorporate within the first six months to one year. Also, most small businesses will save about 50% on taxes after they incorporate. (A qualified CPA will be able to look at your books and give you a more accurate figure.)
MYTH Iíll have to hold meetings and keep lots of records that I donít have time to keep.
TRUTH Not if you register as a "closed" S-Corporation. This means you have waived the requirement to hold all those meetings and keep all those records.
How Do You Get Specific Details?
Contact a qualified CPA in your local area. He or she can give you detailed information on how much it will cost to set everything up, and - most importantly - how much you will save in taxes.
Incorporation is not something to be afraid of. In fact, if youíre one of the many who will save 50% off your taxes in the next year, itís something to go after with a vengeance!
What's In A
Name ... Selecting the Right Business Name
500 people, already in business, how they decided upon their
business name and you will get 500 different answers. Everyone
has a story behind how they chose their business name.
How to Name a Product, Service or Company
hypercompetitive, overcommunicated world, top-of-mind-awareness is probably the best marketing tool
available. Through packaging, an ordinary company, product, or service can become irresistibly compelling.
So, make the ordinary extraordinary. Make yourself outstanding by making yourself stand out!
Business Start-Up Checklist
Starting a new business can be confusing. Where does one begin? Here are some of the most common start-up issues
compiled into a checklist.
For New Home Businesses
You're eager to start your home business and bring in some extra income. Although you're probably bursting with ideas and enthusiasm and want to jump right in, take some time to plan and prepare for your new venture.
Here's a simple checklist you can use in the startup phase of your home-based business.