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corporation or solo proprietor
- Thread starter bluebird
- Start date
this is a reprint of your question THAT I ANSWERED LAST YEAT 2003
What would be the advantages an disadvantages of incorporation as opposed to sole proprietorship.?
Corportations,
FIRST OF ALL I WOULD NOT INCORPORATE AT FIRST ESPECIALLY WITH THE COST OF INCORPORATION, AND UNLESS YOU THINK THAT YOU SHOULD. AT LEAST THE FIRST OR THROUGH THE 2ND YEAR. BUT THATS MY OWN OPINION
THE BIGGEST ADVANTAGE,
A: IT PROTECTS YOUR PERSONAL ASSETS FROM BEING LOST UNLESS YOU USE YOUR HOUSE, OR OTHER PROPERTY FOR COLLATERAL.
B: IF YOUR INVOLVED IN AN ACCIDENT IT WILL AUTOMATICALLY BE YOUR FAULT DUE TO THE FACT THAT YOU DRIVE A TRUCK. IT IS ALWAYS THE TRUCK DRIVERS FAULT EVEN THOUGH IT IS NOT UNLESS YOU HAVE EXCELLENT WITNESSES.
DISAVANTAGES.
A. POSSIBLE DOUBLE TAXATION, FILING FORMS 1120 OR 1065 & 1040
A. MUST GET AN EMPLOYER IDENTIFICATION # OR EIN
B. IRS RUNS INTERNAL AUDITS ON ALL CORPS. PLUS YOUR PERSONAL
1040,
C: MUST SET UP CORPORATE MEETING YEARLY MEETINGS WITH
MINUTES
D: HAVE TO SET UP COMPLETE BOOKS, AS EMPLOYER, YOU ARE THE
EMPLOYEE.
E: HAVE TO HAVE A PAYROLL ACCOUNT TO PAY YOURSELF, TAKE
FEDERAL,SOCIAL SECURITY, MEDICARE, AND UNEMPLOYMENT TAXES
OUT OF YOUR INCOME,
F: FILE QUARTERLY 941 TAX RETURNS AND PAY QUARTERLY THE SOCIAL
SECURITY AND MEDICARE TAX PLUS FORM 940 TAX FORMS FOR THE
UNEMPLOYMENT TAX TO BE PAID ON THE INCOME MADE AT THE END OF
YEAR (TAKEING OUT 15.4% TOTAL ON GROSS INCOME)
G: FILE FORM W-2 AT END OF YEAR,FOR YOURSELF AND THEN FILE FORM
1093/1096 WITH IRS FOR THAT W-2
H. THE COMPANY YOU SIGN ON TO WILL MAKE OUT A 1099MISC TO THE
CORPORATION AT THE END OF THE YEAR
I. MUST KEEP VERY ACCURATE BOOKS. OF ALL ITEMS YOU EXPENSE.
J. MUST CARRY CORPORATE LIABILITY INSURANCE ON BUSINESS
K. TRUCK MUST BE IN CORPORATE NAME AND REGISTERED IN THAT NAME
L. CORPORATION MUST CARRY WORKMENS COMPENTSATION
THESE ARE MOST OF THE DISADVANTAGES. IF YOU WOULD LIKE GO TO [WWW.IRS.GOV] FIND FORMS AND PUBLICATIONS(MUST HAVE ADOBE READER TO READ THE PUBLICATIONS) AND PULL DOWN PUBLICATION 542
THIS IS UP TO YOU AS FAR A INCORPORATING, OR NOT
AS FAR AS SOLE PROPREITOR NOT AS STRINGENT, NO WORKERS COMP,
JUST YOUR TRUCK INSURANCE, LIABILITY AND IF THE LEASING COMPANY OFFERS IT OCCUPATIONAL INSURANCE.
KEEP ALL YOUR EXPENSES LISTINGS OR RECEIPTS, STATING WHAT THEY WERE FOR. FUEL,TOLLS, ETC.
YOU DO NOT HAVE TO KEEP RECEIPTS UNDER $75.00 BUT USE A SMALL NOTE BOOK FOR A EXPENSE LISTING PER DAY, MEALS, SNACKS, NEWPAPER, ETC.
ANY OTHER QUESTIONS, PLEASE DO NOT HESITATE TO CALL ME AT
(704) 739-4039
FAX: (704) 739-3934
OR CELL PHONE: (704) 300-5143
FRANK
FRANK'STAX & BUSINESS SERVICE
226 CHEROKEE ST
KINGS MOUNTAIN, NC 28086
What would be the advantages an disadvantages of incorporation as opposed to sole proprietorship.?
Corportations,
FIRST OF ALL I WOULD NOT INCORPORATE AT FIRST ESPECIALLY WITH THE COST OF INCORPORATION, AND UNLESS YOU THINK THAT YOU SHOULD. AT LEAST THE FIRST OR THROUGH THE 2ND YEAR. BUT THATS MY OWN OPINION
THE BIGGEST ADVANTAGE,
A: IT PROTECTS YOUR PERSONAL ASSETS FROM BEING LOST UNLESS YOU USE YOUR HOUSE, OR OTHER PROPERTY FOR COLLATERAL.
B: IF YOUR INVOLVED IN AN ACCIDENT IT WILL AUTOMATICALLY BE YOUR FAULT DUE TO THE FACT THAT YOU DRIVE A TRUCK. IT IS ALWAYS THE TRUCK DRIVERS FAULT EVEN THOUGH IT IS NOT UNLESS YOU HAVE EXCELLENT WITNESSES.
DISAVANTAGES.
A. POSSIBLE DOUBLE TAXATION, FILING FORMS 1120 OR 1065 & 1040
A. MUST GET AN EMPLOYER IDENTIFICATION # OR EIN
B. IRS RUNS INTERNAL AUDITS ON ALL CORPS. PLUS YOUR PERSONAL
1040,
C: MUST SET UP CORPORATE MEETING YEARLY MEETINGS WITH
MINUTES
D: HAVE TO SET UP COMPLETE BOOKS, AS EMPLOYER, YOU ARE THE
EMPLOYEE.
E: HAVE TO HAVE A PAYROLL ACCOUNT TO PAY YOURSELF, TAKE
FEDERAL,SOCIAL SECURITY, MEDICARE, AND UNEMPLOYMENT TAXES
OUT OF YOUR INCOME,
F: FILE QUARTERLY 941 TAX RETURNS AND PAY QUARTERLY THE SOCIAL
SECURITY AND MEDICARE TAX PLUS FORM 940 TAX FORMS FOR THE
UNEMPLOYMENT TAX TO BE PAID ON THE INCOME MADE AT THE END OF
YEAR (TAKEING OUT 15.4% TOTAL ON GROSS INCOME)
G: FILE FORM W-2 AT END OF YEAR,FOR YOURSELF AND THEN FILE FORM
1093/1096 WITH IRS FOR THAT W-2
H. THE COMPANY YOU SIGN ON TO WILL MAKE OUT A 1099MISC TO THE
CORPORATION AT THE END OF THE YEAR
I. MUST KEEP VERY ACCURATE BOOKS. OF ALL ITEMS YOU EXPENSE.
J. MUST CARRY CORPORATE LIABILITY INSURANCE ON BUSINESS
K. TRUCK MUST BE IN CORPORATE NAME AND REGISTERED IN THAT NAME
L. CORPORATION MUST CARRY WORKMENS COMPENTSATION
THESE ARE MOST OF THE DISADVANTAGES. IF YOU WOULD LIKE GO TO [WWW.IRS.GOV] FIND FORMS AND PUBLICATIONS(MUST HAVE ADOBE READER TO READ THE PUBLICATIONS) AND PULL DOWN PUBLICATION 542
THIS IS UP TO YOU AS FAR A INCORPORATING, OR NOT
AS FAR AS SOLE PROPREITOR NOT AS STRINGENT, NO WORKERS COMP,
JUST YOUR TRUCK INSURANCE, LIABILITY AND IF THE LEASING COMPANY OFFERS IT OCCUPATIONAL INSURANCE.
KEEP ALL YOUR EXPENSES LISTINGS OR RECEIPTS, STATING WHAT THEY WERE FOR. FUEL,TOLLS, ETC.
YOU DO NOT HAVE TO KEEP RECEIPTS UNDER $75.00 BUT USE A SMALL NOTE BOOK FOR A EXPENSE LISTING PER DAY, MEALS, SNACKS, NEWPAPER, ETC.
ANY OTHER QUESTIONS, PLEASE DO NOT HESITATE TO CALL ME AT
(704) 739-4039
FAX: (704) 739-3934
OR CELL PHONE: (704) 300-5143
FRANK
FRANK'STAX & BUSINESS SERVICE
226 CHEROKEE ST
KINGS MOUNTAIN, NC 28086